((Automated translation by Reuters, please see disclaimer https://bit.ly/rtrsauto))
(Adds context to paragraphs 3 and 5) by Elvira Pollina
The boss of Telecom Italia (TIM)
TLIT.MI CEO Pietro Labriola appears set to secure a second term after major investor Vivendi VIV.PA decided to abstain in a shareholder vote on renewing the board of directors of the former monopoly of telephony.
TIM shareholders will vote on the composition of the new board of directors on Tuesday. With its list of 24%, Vivendi was the main obstacle to the reappointment of the current CEO, who wants to continue a restructuring focused on the planned sale of TIM’s fixed access network to the American fund KKR KKR.N .
The French media group, an investor in TIM since 2015, made clear its frustration with the way the company was managed and reiterated its opposition to the KKR deal, but stopped short of supporting an alternative candidate to the position of general manager.
“Vivendi does not wish to be associated with decisions regarding appointments to the board of directors, because it believes that it is up to the current management and its financial backers to resolve the difficult situation in which TIM finds itself,” said the group in a press release late Monday.
Vivendi is no longer represented on the TIM board of directors.
Activist investors Merlyn Partners and Bluebell Capital Partners, which each own 0.5% of TIM, presented separate slates of candidates seeking Vivendi’s support to challenge the outgoing board slate led by Mr. Labriola, who has held the position for two years.
Backed by the Italian government, which has an indirect stake in TIM, the sale of the network is meant to mark a new beginning for a group long hobbled by debt and fierce competition.
Vivendi, TIM’s largest shareholder, has criticized the sale of the network, questioning both the price and the viability of the residual services business. The French media group is fighting the sale, worth up to 22 billion euros ($23.43 billion), in court.
“In accordance with its general position, Vivendi will vigorously pursue the appeal against the November 2023 board resolution before the Milan court and any other legal means at its disposal to protect its rights,” Vivendi added, referring to the agreement with KKR.
Mr. Labriola has been under pressure since his shares’ record fall last month, when markets rejected the financial prospects of a slimmed-down TIM business.
($1 = 0.9391 euros)