Activist investor Elliott Management issued backing for Telecom Italia CEO Amos Genish (pictured), who said he would walk away if the investment company succeeded in overhauling the operator’s board of directors.
Genish, who was brought in by the operator’s top shareholder Vivendi in 2017, told UK newspaper The Sunday Telegraph his position would be “untenable” if Elliott Management wins a vote scheduled at Friday’s (4 May) shareholder meeting to install a new set of directors it has nominated to lead the company.
Vivendi is also expected to put forward its own slate of executives, as the two companies continue to jostle for power of the Italian operator. Genish said in the interview that only the appointment of Vivendi’s directors would “support our long-term industrial plan”.
In a statement released today (30 April), seemingly responding to the interview, Elliott Management sought to reassure Genish, stating the company would work with him on his business plan and long-term strategy should it secure control of the board, adding there is “no alternative business plan”.
“Elliott and its proposed independent nominees fully support Mr Genish and are encouraged that Mr Genish has committed to remain at TIM to execute his plan with the full support of the board of directors, regardless of the composition.”
Elliott Management, which has built up a 9 per cent stake in TIM, argues Vivendi is not running the operator in the shareholder’s best interests while Vivendi, which holds a 24 per cent stake, believes Elliott Management is only looking to make short-term financial gains.
Should Elliott Management win the vote, there were reports it would seek to implement changes in the operator’s long-term strategy including ushering in a possible sale of the company’s broadband network.
Indeed, a change in CEO could create further instability at the operator. The Sunday Telegraph reported Genish secured 98 per cent of shareholder support in a vote last week.
Vivendi’s ownership of Telecom Italia has also drawn criticism for the Italian government.