Vivendi to Abstain from Telecom Italia Share Conversion Vote
December 11 2015 - 6:50PM
Dow Jones News
Vivendi SA said Friday it will abstain from voting on Telecom
Italia SpA share conversion plan at next week's shareholders
meeting—a move that could kill the plan altogether.
Telecom Italia's board last month proposed a share conversion
that, if approved, would convert Telecom Italia's savings
shares—which have no voting rights and command a lower price—into
ordinary stock, which have voting rights.
As part of the plan, all shareholders would get diluted by about
30% and Telecom Italia would get €500 million ($549.8 million) in
cash.
Vivendi, currently Telecom Italia's largest shareholder, would
see its stake go from the current 20% to about 13%, should the plan
pass.
"Vivendi questions the fairness of the proposed conversion
ratio," the French company said in a statement.
Yet analysts have long touted a conversion of the nonvoting
shares as a way for Telecom Italia to simplify its corporate
structure.
Telecom Italia said Friday that the total share capital
registered to the general meeting is 55.6% so far. The proposal
would need a two-thirds majority of votes in favor to pass so,
considering the current share capital registered at the meeting, it
would need the approval of Vivendi.
Vivendi's move represents the opening salvo in a weekend of
negotiations between Telecom Italia's key shareholders ahead of a
shareholder meeting on Dec. 15.
The French firm proposed two resolutions of its own at the
meeting: to increase the company's board to 17 members from 13, and
to name four members of the Italian company's board.
The four members are Arnaud de Puyfontaine, Sté phane Roussel,
Hervé Philippe and Fé licité Herzog.
But several proxy advisory firms have recommended their clients
to vote against such proposals as they would reduce the
independence of the board and would make it too large without a
reasonable justification.
Responding to some of the concerns expressed by investors,
Vivendi said its four chosen board members should "act in the sole
interest of [Telecom Italia] and all its shareholders."
The French group currently has no representatives on the
company's board.
Write to Nick Kostov at Nick.Kostov@wsj.com and Manuela Mesco at
manuela.mesco@wsj.com
(END) Dow Jones Newswires
December 11, 2015 18:35 ET (23:35 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
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