Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Proxy adviser tells TIM shareholders to reject Vivendi board plans

Stock MarketsMar 12, 2019 19:05
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: Telecom Italia's logo for the TIM brand is seen on building roof downtown Milan

By Agnieszka Flak

MILAN (Reuters) - Proxy adviser ISS has recommended that Telecom Italia (MI:TLIT) (TIM) shareholders vote against a proposal by the phone group's top investor Vivendi (PA:VIV) to replace five board directors appointed by Elliott, ISS said on Monday.

Vivendi and activist investor Elliott have been fighting since last year over how to revive Italy's biggest underperforming phone group, which is saddled with more than 25 billion euros (21.4 billion pounds) of debt.

They will face off again on March 29 when shareholders are to vote on Vivendi's proposal.

Vivendi is seeking the removal of TIM Chairman Fulvio Conti and four other board members, Alfredo Altavilla, Massimo Ferrari (NYSE:RACE), Dante Roscini and Paola Giannotti de Ponti, citing a "substantial lack of independence and disrespect for the most basic and fundamental corporate governance rules".

The French media group, which owns 24 percent of TIM, has alleged that the five board members conspired to replace former CEO Amos Genish, who was removed while on a business trip abroad in November.

In a report released last week, TIM's auditors said they had found irregularities in the way information was shared with the company's board members in the run-up to Genish's ousting.

The auditors said that contrary to a statement by Chairman Conti some information was only shared with board members appointed by Elliott before being brought to the attention of the whole board.

But ISS said Vivendi, which would gain the upper hand on TIM's board if its proposal were approved, had itself a poor track record on governance issues and that another change in the make-up of the board would not help TIM.

"On balance, (Vivendi) has not made a compelling case that change is warranted at TIM - particularly as shareholders are unlikely to benefit from a constant swapping of the board composition as a result of the tug-of-war between the two large shareholders," ISS said.

"Vivendi's arguments are mostly based on governance, though Vivendi's own past actions undermine its moral authority in this case and may actually justify the steps taken by the Elliott- directors," ISS said.

A Vivendi spokesman said the group was not surprised by the ISS verdict. "They generally tend to side with Elliott."

The U.S. hedge fund, which holds just under 10 percent of TIM, wrested board control from Vivendi in May by appointing 10 candidates - two-thirds of the total - to its board after accusing the French investor of serving its own interests.

Last November, one of the Elliott-appointed board directors, Luigi Gubitosi, succeeded Genish at the helm of the former state phone monopoly. Italian state lender CDP, which previously sided with Elliott, has also been raising its stake in TIM in the run up to the March meeting.

"We have no quarrel with Gubitosi, no quarrel with CDP, no quarrel with the Italian government but we have a quarrel with the governance of Elliott," the Vivendi spokesman added.

On Tuesday, Elliott reiterated its position that "Vivendi's nominees are unsupportable, lack true independence and would simply return control to a group with demonstrable and unacceptable conflicts of interest".

Since becoming a TIM investor early last year, Elliott has advocated for a more radical shake-up of the telecoms group which includes plans to spin off its network infrastructure, sell assets and convert savings shares into ordinary ones.

Proxy adviser tells TIM shareholders to reject Vivendi board plans
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email