MILAN (Reuters) - Vivendi has been an “awful” investor in Telecom Italia (TIM), Italy’s outgoing Industry Minister Carlo Calenda told daily la Repubblica on Monday, as the French media company fights to keep its grip on Italy’s biggest phone group.
“I am in favour of foreign investments, but this does not mean standing aside when they destroy value rather than creating it, especially when there’s a strategic interest at stake,” Calenda said in the interview.
Vivendi declined to comment on the issue.
TIM has lost a quarter of its market value since Vivendi first took a stake in the middle of 2015. The French company is now TIM’s biggest investor with just under 24 percent.
Last year, Vivendi, using its position as TIM’s largest shareholder and backed by investment funds, appointed two thirds of Telecom Italia’s board and picked its CEO Arnaud de Puyfontaine as chairman. It also made Amos Genish, a favorite of Vivendi’s Chairman Vincent Bollore, CEO of the Italian group.
Vivendi’s management of the company has led to tensions with the Italian government and Rome eventually decided to use its so-called “golden powers” to ensure it had a say in some key decisions.
The French company is also facing a challenge from activist hedge fund Elliott, which has a built a 9 percent stake, and wants to make changes to TIM’s board.
To increase its influence, the government bought a 4.262 percent stake in TIM through its investment arm Cassa Depositi e Prestiti (CDP) at the beginning of April.
The CDP investment follows a decision by TIM to put its telecoms network, which analysts have valued at up to 15 billion euros, into a legally separate company, called Netco and fully controlled by TIM.
Calenda also defended CDP’s move and said that Italy should have a single telecoms network, speaking in the interview.
“CDP has intervened to support a project to turn Telecom Italia into a (genuine) public company and spin off the network,” the minister said, adding that CDP did not want to take control of the company.
Calenda, a member of the caretaker centre-left government headed by Prime Minister Paolo Gentiloni, remains in his ministerial post pending efforts to end a political stalemate following a national election last month.
Some politicians and Elliott have advocated the creation of a single national network via the merger of Telecom Italia’s NetCo with rival Open Fiber, a broadband firm jointly owned by the CDP and state-controlled utility Enel.
Calenda had previously said that Elliott’s plan for soon-to-be network company Netco to be listed or partially sold was in line with government’s strategy to protect public interests.
Additional reporting Mathieu Rosemain in Paris,; Editing by Robin Pomeroy/Keith Weir and Jane Merriman