Vivendi’s goal to create a southern-European media powerhouse by leveraging its Italian assets was dealt a second blow in as many days, as a leading proxy advisory company advised against its proposed board structure for Telecom Italia.
Institutional Shareholder Services (ISS) said in a report Telecom Italia’s shareholders should not approve Vivendi’s list of suggestions – named a slate – because the France-based media company’s preferred choice of Telecom Italia chairman, Vivendi CEO Arnaud de Puyfontaine (pictured), would be “over boarded”.
The term literally means someone who sits on several boards at the same time. ISS noted de Puyfontaine serves as a board member at Telecom Italia, Schibsted and Gloo Networks, in addition to his role as Vivendi CEO.
De Puyfontaine was one of ten candidates suggested by Vivendi. Its CFO Herve Philippe and general counsel Frederic Crepin were also on the list.
ISS said a second slate of suggested Telecom Italia board members submitted by Institutional Investors (Assogestioni), is “better positioned to represent the long-term interests” of the operator’s minority shareholders. The latter slate would also be better placed to “carry out independent oversight of management’s actions”.
Telecom Italia’s shareholders are due to decide the future make-up of the board at an AGM on 4 May.
ISS’ advice was mirrored by Glass Lewis, another proxy advisor, Reuters reported.
The proxy advisory companies’ recommendations follow a decision by Italian regulator Agcom to force Vivendi to reduce its holding in either Telecom Italia or Mediaset.
Vivendi currently holds a 24.4 per cent stake in Telecom Italia and 28.8 per cent of Mediaset – the latter approaching the level where Vivendi would be required to launch a full takeover bid.
The French media company said it would challenge Agcom’s ruling. In a statement, Vivendi reiterated it “neither controls nor exercises a dominant influence” on Mediaset, noting its stake is below the 40 per cent held by Italian holding company Fininvest.
“Vivendi reserves the right to take any appropriate legal action to protect its interests, including filing an appeal to the Agcom decision at the Regional Administrative Court (TAR) and to submit a formal complaint to the European Commission for the breach of EU law,” it stated.