Elliott boosts TIM stake ahead of Vivendi showdown - Mobile World Live

Elliott boosts TIM stake ahead of Vivendi showdown

01 FEB 2019

Activist investor Elliott Management increased its stake in Telecom Italia, as an ongoing battle for power with the operator’s largest shareholder Vivendi continues to escalate.

A SEC filing showed Elliott Management had boosted its holding in the operator from 8.8 per cent to 9.4 per cent, giving it more than 1.4 billion ordinary shares in the Italian operator.

The activist investor, which gained control of Telecom Italia’s board in May 2018, said in the filing it believes Telecom Italia’s shares were undervalued and represented an attractive investment opportunity.

The filing indicates Elliott Management bought the shares between 27 December 2018 and 30 January 2019 at a price of between €0.46 and €0.53 per share.

Taking advantage
Vivendi, which holds a stake of just under 24 per cent in the operator, has been turning up the heat on Elliott Management in its bid to regain control of the boardroom. A meeting is planned for 29 March, where shareholders will vote on Vivendi’s request to replace five directors appointed by Elliott Management.

In a statement responding to Elliott Management’s stake increase, Vivendi accused the hedge fund of “acting as a pure financial investor” and taking advantage of Telecom Italia’s share drop.

“The share price is currently so low because of Elliott’s own terrible governance since 4 May. There is currently no industrial plan,” Vivendi said.

The wrangling between the operator’s two shareholders has partly led to a drop of 40 per cent in Telecom Italia’s share price over the past year. The company is also straddled with a high debt load of €25 billion.

In November 2018, Telecom Italia’s board ousted CEO Amos Genish, who was appointed by Vivendi, and replaced him with Luigi Gubitosi, an Elliott Management-appointed director. However, another board overhaul could put Gubitosi’s position into question.

As part of its filing, Elliott Management said any changes in the board “at this juncture would be detrimental to the execution and delivery” of Telecom Italia’s value creation plans.

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Kavit Majithia

Kavit joined Mobile World Live in May 2015 as Content Editor. He started his journalism career at the Press Association before joining Euromoney’s graduate scheme in April 2010. Read More >>

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