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TEHRAN, March 15 -Telecom Italia’s main shareholder, French media group Vivendi (VIV.PA), has declared itself ready to support an alternative strategy to boost the Italian firm’s short-term share price, as activist investor Elliott Advisors pushes for a shakeup.
TEHRAN,Young Journalists Club (YJC) -Telecom Italia’s main shareholder, French media group Vivendi (VIV.PA), has declared itself ready to support an alternative strategy to boost the Italian firm’s short-term share price, as activist investor Elliott Advisors pushes for a shakeup.
Last week Elliott said it had taken an unspecified stake in Telecom Italia (TIM) and was ready to replace board members in a drive to improve strategy, value and governance.
Vivendi, which owns 24 percent of TIM, told Reuters on Wednesday night that it still supported a longer-term strategy unveiled by TIM’s new chief executive last week and was committed to creating an Italian telecoms and content champion.
However, it added, “like any other shareholder sensitive to leveraging its investments, Vivendi would be ready, if necessary, to support another strategy capable of generating a short-term rise in the TIM share price,” a Vivendi spokesman said in an email.
“As always, the shareholders will decide.”
In addition, Vivendi CEO Arnaud De Puyfontaine, who also serves as executive chairman of TIM, might suspend his executive functions at the former phone monopoly. As chairman, he will have a central role in dealing with Elliott’s campaign.
“During the period devoted to this strategic debate, Arnaud de Puyfontaine has indicated that he is considering suspending his executive functions at TIM,” the Vivendi spokesman said.
SHARES RISE
Elliott has yet to outline its proposals for TIM, but sources said the fund wants it to be run as a true “public company” with the majority of board members independent.
The sources said it also plans to push for the conversion of TIM’s savings shares into ordinary ones - a move that would help raise cash but which Vivendi blocked in late 2015 - and seek a spin-off of the soon-to-be-created network company.
TIM shares rose 0.6 percent to 0.79 euros in morning trade on Thursday. The savings shares, which offer a guaranteed dividend but do not entitle holders to vote, were up 1.3 percent.
TIM has lost more than one-third of its market value since Vivendi first took a stake in mid-2015, though the French investor says the stock had been declining for a decade before that. It is down more than 70 percent since the start of 2005.
TIM has not paid a dividend since 2012, but last week new Chief Executive Amos Genish held out the promise of richer shareholder returns with a new three-year strategy meant to help it cope with new rivals appearing in both broadband and mobile.
Vivendi said in Wednesday’s email that the 2018-20 plan was an ambitious and realistic move to boost TIM’s financial performance. Some brokerages, including Goldman Sachs and Bryan Garnier, raised their recommendations on the stock after the strategy was released.
Source:Reuters
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