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Telecom Italia boss on course for second term as Vivendi abstains

Published 22/04/2024, 17:41
© Reuters. The logo of French media giant Vivendi is seen in Paris, France, January 31, 2022. REUTERS/Violeta Santos Moura/ File photo

By Elvira Pollina

MILAN (Reuters) -Telecom Italia (TIM) boss Pietro Labriola appeared set to secure a second term after leading investor Vivendi (EPA:VIV) decided to abstain in a shareholder vote on the renewal of the former phone monopoly's board.

TIM shareholders will vote on Tuesday on the composition of the new board. With its 24% slate, Vivendi was the main hurdle to a reappointment of the current CEO, who wants to press ahead with a revamp centred on a planned sale of TIM's fixed-line access network to U.S. fund KKR.

The French media group, a TIM investor since 2015, made clear its frustration with the way the company has been run and repeated its opposition to the KKR deal but stopped short of backing an alternative candidate for CEO.

"Vivendi does not wish to be associated with decisions on board appointments, as it believes that it is up to the current management and its backers to resolve the difficult situation in which TIM finds itself," it said in a statement late on Monday.

Vivendi no longer has representation on the TIM board.

Activist investors Merlyn Partners and Bluebell Capital Partners, each owning 0.5% of TIM, have put forward separate slates of candidates seeking Vivendi's backing, in a challenge to the outgoing board's list headed by Labriola, who has held the job for two years.

Backed by the Italian government, which holds an indirect stake in TIM, the network sale is intended to mark a fresh start for a group long hobbled by debt and fierce competition.

Vivendi, TIM's single largest shareholder, has criticised the network sale, questioning both the price and the sustainability of the residual services business. The French media group is fighting the sale, which is worth up to 22 billion euros ($23.43 billion), in court.

© Reuters. The logo of French media giant Vivendi is seen in Paris, France, January 31, 2022. REUTERS/Violeta Santos Moura/ File photo

"Consistent with its general position, Vivendi will vigorously pursue the appeal against the Board of Directors' resolution of November 2023 at the Court of Milan and any other legal means at its disposal to protect its rights", Vivendi added, referring to the KKR deal.

Labriola has come under pressure after a record stock plunge last month when markets gave a thumbs down to the financial outlook for a slimmed down TIM business. ($1 = 0.9391 euros)

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