Funds reject call to replace Telecom Italia board in early voting
MILAN (Reuters) - An activist shareholder campaign to replace Telecom Italia's (TLIT.MI) board has little backing from foreign shareholders, according to early voting data seen by Reuters, in a sign that the effort could founder at a meeting set for December 20.
Telecom Italia is the target of a campaign by 5 percent investor Marco Fossati and small shareholders group ASATI aimed at ousting the company's board, which they say caters more to the interests of core shareholders, like Spain's Telefonica (TEF.MC), than to all other investors.
According to early data from an electronic voting platform, funds owning more than 60 million Telecom Italia shares voted against the proposed board removal while holders of over 20 million shares abstained. None voted in favour.
This means a majority of over 70 percent of the small sample captured by the early data were against the request to remove the board. More votes will be cast after big proxy advisory firms like ISS and Glass Lewis make their voting recommendations.
"This is a very early sign of shareholder sentiment towards Fossati's proposal," said Miguel Carrasco, managing director at Proxy Census, an international proxy solicitation firm.
Carrasco said he expected proxy advisors to vote in favour of Telecom Italia and against the proposal of Fossati.
If the activist campaign fails, Telecom Italia will continue with plans recently outlined by Chief Executive Marco Patuano to sell assets in order to fix its balance sheet and fund investments.
Telecom Italia shareholders will hold a general meeting on December 20 to decide on the matter.
Telefonica and Italian financial companies Assicurazioni Generali (GASI.MI), Intesa Sanpaolo (ISP.MI) and Mediobanca (MDBI.MI) are bound to a shareholder pact. They jointly control 22.4 percent of Telecom Italia through holding company Telco.
Telco said last week it will vote against Fossati's proposal.
Earlier this month, Patuano said the board will likely need to be rejigged when its tenure expires in April, partly to take into account legislation requiring a 20 percent female quota.
(Additional Reporting by Leila Abboud, editing by Stephen Jewkes)