Vivendi inevitably moans about TIM now that it’s not running it

French telecoms and media conglomerate Vivendi has issued a statement saying how rubbish Italian operator group TIM has been since Vivendi lost control of the boardroom.

Back in May Vivendi lost out to activist investor firm Elliott in a battle to install their respective proxies on the TIM board of directors. Despite the fact that Vivendi’s chosen CEO, Amos Genish, remains at the helm, TIM’s share price has gone down the toilet since then. As Vivendi still owns nearly a quarter of those shares, this decline adds insult to injury.

Here’s the Vivendi statement in full.

Vivendi is deeply concerned by the disastrous management of Telecom Italia (TIM) since Elliott took control of its Board of Directors following the May 4, 2018 Shareholders Meeting:

  • The stock market performance is dramatic: TIM’s share price dropped about 35% since May 4, 2018, and is at its lowest level in five years while in its April 9, 2018 position paper, Elliott promised a doubling of the share price over the next two years.
  • The new governance team is failing: the spreading of rumors (including the departure of the CEO) is causing dysfunction that is harmful to the smooth operation and results of TIM.

Vivendi, its largest shareholder with 24% of the shares, remains convinced of TIM’s significant development potential.

The second bullet point seems pretty thin. Companies like Vivendi routinely insist they don’t comment on rumours and speculation and yet, when it suits them, the existence of rumours that, for all we know, could have originated from sources sympathetic to Vivendi itself, are used as primary evidence of corporate disfunction. Where, for example, might rumours about the CEO leaving have come from?

TIM, of course, is having none of it. Here’s Tim’s counter-statement in full.

TIM’s Chairman, Fulvio Conti, is deeply disappointed by the groundless and absurd accusations – which he rejects – made by Vivendi about the company’s operations.

Since its appointment the Board has been and still is focused on the execution of the Strategic Plan, outlined by Vivendi itself during its management.

TIM is a relevant player in Italy’s economy, with over 50k employees, more than 40 million lines between mobile and landline, able to confront the evolution of the market and competition, as shown by the H1 2018 results.

Finally, the concentration of negative elements coming from the other side of the Alps and influencing the share price is paradoxical for Vivendi.

TIM’s role in Italy’s economy seems entirely irrelevant to this spat and its invocation just serves to illustrate how petty and superficial this tug of love between Elliott and Vivendi has always been. The reference to the Alps was fun, though, and it would appear to be highly symbolic that Conti rather than Genish issed the counter-statement.

It’s not immediately obvious what Vivendi hopes to achieve from issuing such an announcement, apart maybe from some brief catharsis. In the longer term it probably has its eyes set on the next TIM AGM, at which it will presumably bid to reclaim control of the board room. And if TIM’s share price hasn’t recovered significantly by then it may well win too.

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