Activist hedge fund Elliott won a showdown with controlling stakeholder Vivendi at a meeting of shareholders of Telecom Italia (TIM) on Friday. Elliott's list won the most votes and landed 10 seats on the board, with Fulvio Conti, Alfredo Altavilla and Luigi Gubitosi coming in, among others. French entertainment group Vivendi is now in a minority position with five representatives. Elliott revealed that it had a 9% stake in the former Italian monopoly operator earlier in the year, saying it wanted to revamp the board and increase shareholder value.
"Today's win for the independent slate sends a powerful signal to Italy and beyond that engaged investors will not accept substandard corporate governance, paving the way for maximising value creation for all TIM's stakeholders," Elliott said in a statement, adding that it fully backed CEO Amos Genish and his business plan. "Today's landmark vote represents a victory for all shareholders and opens a new chapter for TIM, in which the Company can build upon a foundation of improved governance to secure sustained value creation for all stakeholders".
The Italian government's investment holding, Cassa Depositi e Prestiti SpA, took up a 5% stake in April on the grounds of Telecom's strategic importance.
Vivendi, which is owned by French financier Vincent Bollorè and controls 24.9% of Telecom, said it does not intend to pull out of the Italian telecom firm after the defeat.
Vivendi Communications Director Simon Gillham said the French group will "support Genish and his long-term industrial strategy.
"We will be very attentive and watchful so that the strategy does not change," Gillham added.
Fulvio Conti, who is now considered Telecom's president in waiting, expressed delight.
"Now it's a real public company," Conti said.
"I'm satisfied".
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