PARIS (Reuters) - French media conglomerate Vivendi (VIV.PA) said on Wednesday the management of Telecom Italia (TIM) (TLIT.MI) had been “disastrous” since activist fund Elliott had seized control of the Italian firm’s board.
Elliott 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, the activist fund had 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.
TIM’s share price has lost 35 percent since Elliott took control in May, while the fund had promised to double it within two years, Vivendi said in a statement.
Vivendi blamed the company’s management for the performance. It added TIM’s governance was “failing” and said the company and its results were suffering as a result.
Vivendi, TIM’s largest shareholder with a 24 percent stake, said, however, it remained convinced that the company had strong potential.
TIM Chairman Fulvio Conti, appointed in May with the support of Elliott, rejected Vivendi’s accusations, calling them “absurd and unfounded”.
“Since its appointment, the board, in its entirety, has been and still is working to implement the strategic plan put in place by Vivendi,” Conti said in a statement.
He added that TIM, Italy’s biggest phone group with about 50,000 employees, was in a position to face market developments and its competitors.
TIM CEO Amos Genish, appointed when Vivendi controlled the board, is looking to execute a three-year turnaround plan focusing on a digital transformation, fixing the group’s finances and getting back an investment grade credit rating.
However, the former state phone monopoly has been facing growing challenges in both fixed and mobile: broadband group Open Fiber is rolling out a rival fiber optic network while French telecoms group Iliad (ILD.PA) in May launched its low-price mobile offer for Italy.
Reporting by Inti Landauro; Additional reporting by Agnieszka Flak; Editing by Leigh Thomas and Janet Lawrence