Vivendi Pushes for Representation on Telecom Italia Board
December 15 2015 - 9:44AM
Dow Jones News
By Giada Zampano
MILAN--French media company Vivendi SA pressed its case for
representation on the board of Telecom Italia SpA on Tuesday, at
the start of a divisive shareholders' meeting that will lay bare
the tensions between the Italian telecoms giant and its largest
shareholder.
During a speech to Telecom Italia's shareholders, Vivendi Chief
Executive Arnaud de Puyfontaine emphasized that the French group
has a long-term, strategic interest in Telecom Italia--one that
deserves board representation.
"We are here for a long-term, industrial investment and not for
financial reasons," he said.
Vivendi--controlled by French industrialist Vincent Bolloré--has
spent more than EUR3 billion ($3.29 billion) to acquire a 20% stake
in Telecom Italia, making it the Italian company's largest
shareholder. It isn't represented on the board but is eager to join
to give the telecom firm what it considers to be better
direction.
Mr. de Puyfontaine confirmed his firm's request to increase the
Telecom Italia board to 17 members from 13 and to name four
directors representing Vivendi. However, opposition from a number
of Telecom Italia's other investors means the plan is likely to be
rejected by shareholders at a vote later Tuesday.
Mr. de Puyfontaine also reiterated Vivendi's plans to abstain on
Tuesday on a Telecom Italia share conversion proposal--the
abstention is likely to defeat that proposal as well.
Under the plan, all shareholders would be diluted by about 30%,
while Telecom Italia would receive EUR500 million in cash. Vivendi
would see its stake go from the current 20% to about 13%, should
the plan pass. It has said it believes the cash payment for savings
shareholders under the plan is insufficient.
At the shareholder meeting, Telecom Italia's top management
defended the conversion plan, stressing that its terms were defined
with the help of outside advisers.
The conflict between shareholders and Telecom Italia's
management could leave the company paralyzed. The telecom firm has
suffered for years from a turnover of major shareholders, a lack of
clear strategy and fierce competition in its domestic market.
Write to Giada Zampano at giada.zampano@wsj.com
(END) Dow Jones Newswires
December 15, 2015 09:29 ET (14:29 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
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