For Telecom Italia (today Tim) the torments seem to never end. Since the American fund Elliott entered the field, which conquered the majority of the board in the last spring meeting, the stock has lost 35% on the Stock Exchange. But now it is the sale of Sparkle, just started by CEO Amos Genish, who is in the sights: his road immediately became very impervious.
Yesterday the Deputy Prime Minister and Minister of Economic Development, Luigi Di Maio, was categorical: "We will never allow Sparkle to be sold," he told Il Sole 24 Ore. And Vivendi, Telecom's first shareholder in open conflict with the Elliott fund, agrees with him, to the point that a new axis seems to be emerging between the yellow-green government and the French, which could change the fate of the largest Italian telephone company.
"The sensitive information" transmitted by the cables of Sparkle, which is the only Italian company that activates terrestrial and satellite circuits for our military, "is a problem" and makes Sparkle a strategic asset not so much for Telecom Italia as for the country: warns Di Maio, who has the precious delegation for telecommunications in the Government. Selling Sparkle therefore becomes very problematic even if it would serve to reduce Telecom's enormous debt.
But the other novelty of the last few hours is the new outing by Vivendi, who has his teeth poisoned against the Elliott fund, accused of "disastrous management": through their president Arnaud de Puyfontaine, the French have not missed the opportunity to align themselves with the Di Maio's point of view. Vivendi's manager was very clear and speaking at a conference in Puglia he said: "I agree with Di Maio: Sparkle should not be sold".
What will happen now? Certainly the CEO of Tim Amos Genish, manager at the time chosen by Vivendi to implement the latest industrial plan and then accepted by the Elliott fund, is even more on the gridiron and the repeated denials of his exit from the company were not enough to calm the picture. But the point is that Vivendi will do battle in the board of directors on 24 September with the aim of going to a new meeting that will overturn the balance of the board, today in favor of the Elliott fund. And this time Vivendi could have the Cassa Depositi e Prestiti (Cdp) on its side which in the spring, with the support of the Gentiloni government, was the balance between the two contenders.
At this point predicting a hot autumn for Telecom Italia is all too easy.
SECURITY UPDATE TRAINING
“Elliott takes note of Vivendi's press release dated September 5th”, writes the American fund in a note, adding that he shares “Vivendi's concerns about the performance of the Telecom Italia share, a problem that has persisted for years. However, Elliott regrets that Vivendi has chosen to attack Tim's management, the board and one of his associates, rather than working constructively towards a solution ”.
Elliott says Vivendi has fallen victim to the short-term view it has previously criticized. “After Vivendi itself had control of the company for years, it is now ready to review the work of the new board just 4 months after its appointment. How can Vivendi escape his responsibilities for Tim's current situation, when he has managed the company for so long while the new board has been in office for such a short time?
The press release also underlines that, as the president, Fulvio Conti, has already said, a plan is being "carried out that has been drawn up and approved by Vivendi and actually promoted by Vivendi". Moreover, Elliott always underlined, the current CEO and financial director were brought to the board by Vivendi.
Furthermore, “Elliott urges Tim's shareholders to give the new board time to demonstrate that it is capable of creating shareholder value in what is admittedly a difficult time for the Italian stock market and, in general, for companies of telecommunications".
The press release then recalls that Vivendi itself maintains a significant representation on the board: "If it now believes that there is a need for new ideas, Elliott would welcome its help in promoting solutions aimed at creating value".
