MILAN (Reuters) - Telecom Italia’s main shareholder Vivendi is very concerned about the situation at the Italian phone group since activist fund Elliott seized board control and is weighing its options, a spokesman for the French media company said.
The activist fund wrestled TIM board control from Vivendi in May after a two-month campaign to shake up the way the French group had been running the former telecoms monopoly.
Besides a governance overhaul, Elliott has proposed a spin-off and partial sale of a soon-to-be-created network company, a conversion of savings shares, a return to dividends and asset sales.
“Elliott promised all kinds of things but now they seem to have disappeared ... It’s a big mess,” the spokesman told Reuters on Wednesday.
“There is no collective Elliott team, they’re all over the place,” he said.
Vivendi is concerned about TIM’s current share price and the lack of visibility on the company’s turnaround plan, he said, adding it was raising its level of vigilance.
Asked if Vivendi was considering calling a new shareholder meeting to try to overhaul the board, he said no decision had been taken yet.
In an emailed comment TIM Chairman Fulvio Conti, appointed in May with the support of Elliott, said he was “surprised and disappointed” to read the Vivendi spokesman’s comments.
“In a positive and constructive climate, the Board is aligned with the CEO and the management to deliver the goals of the (TIM) strategic plan,” he said.
TIM CEO Amos Genish, appointed when Vivendi controlled the board, is looking to execute a three-year plan focusing on a digital transformation, fixing the group’s finances and getting back an investment grade credit rating.
In a conference call on Wednesday on its first-half results Genish reiterated his long-term commitment to the company.
On Tuesday, TIM said its revenue and core earnings in the first six months both fell, adding it would consider asset sales of some subsidiaries including broadcasting unit Persidera.
Telecom Italia shares were up 1.8 percent at 1443 GMT though they remained close to their lowest level in nearly five years, having fallen more than 14 percent so far this year.
Reporting by Agnieszka Flak and Stephen Jewkes. Editing by Jane Merriman and David Evans