(Recast with TIM statement, added details of first hearing in paragraph 7) by Elvira Pollina
Telecom Italia (TIM) TLIT.MI said on Friday that its main investor Vivendi
VIV.PA had filed a complaint with a court in Milan to challenge the sale to KKR KKR.N of the domestic fixed telephone network of the former telephone monopoly, for an amount of 19 billion euros (21 billion dollars).
In its complaint, Vivendi asked the court to overturn the decision of TIM’s board of directors to sell the network, adding that the filing did not request the immediate suspension of the transaction under an expedited procedure or any other precautionary measure, TIM said.
TIM shares rose as much as 6.8% after Reuters reported that Vivendi was not seeking an immediate suspension of the deal, which TIM wants to finalize by next summer, before paring gains to close up 2.36%.
TIM’s board of directors agreed on November 5 to sell the group’s most valuable asset, as part of a plan championed by chief executive Pietro Labriola to revive the group and reduce its debt.
Supported by the Italian government, the sale was described as “illegal” by Vivendi, which holds a 24% stake in TIM and had demanded a shareholder vote on the deal. TIM, for its part, said the board had acted within its rights.
In a statement, TIM said it would continue to advance its plans to complete the transaction without delay.
A first hearing on the case could take place in April, according to a source briefed on the matter.
Vivendi, which first invested in TIM in 2015 and has been repeatedly forced to reduce the value of its stake, declined to comment on Friday.
The Paris-listed company sought a higher price for the asset and questioned the viability of the business left behind.
It faces a loss of around 75% on its initial investment of 4 billion euros in TIM, which it now considers a financial investment – and no longer a strategic holding.
($1 = 0.9124 euros)