Vivendi faced growing resistance to attempts to overhaul the management of Telecom Italia, with two proxy advisory companies recommending shareholders vote against the French company’s proposals.
The majority shareholder wants to replace five Telecom Italia board members with “five truly independent and extremely competent directors”. It accused Elliott Management, which wrested control of the board away from Vivendi in May 2018, of organising “shadow board meetings”, appointing advisers without following internal policies, and conducting a search for a new CEO without considering external candidates.
Financial Times reported Italian proxy advisory outfit Frontis Governance is against Vivendi’s proposal, stating that while there have been breaches of governance at board level, it had “even more serious concerns over the attempt of Vivendi to resume control”.
Vivendi argued previously that it is looking to appoint independent directors, not a chairman or CEO.
Earlier this week, Reuters reported that proxy adviser ISS had also argued against Vivendi because it does not have a clean slate with regard to governance issues and shareholders are “unlikely to benefit from a constant swapping of the board composition as a result of the tug of war between the two large shareholders”.
Italian state lender CDP this week increased its stake in Telecom Italia to 8.7 per cent, with Reuters reporting it is looking to increase this to 10 per cent in the near future. CDP has previously supported Elliott Management.
Elliott Management holds around a 10 per cent stake in the operator, while Vivendi holds 24 per cent.
Telecom Italia is holding a shareholder meeting on 29 March, where a vote on the Vivendi issues is due to take place.