It was in the air, and it finally happened. The Telecom Italia shareholders' meeting which was to reorganize the governance of the largest Italian telecommunications company between now and December 31, 2020, with the complete renewal of the board of directors (and the determination of its number and remuneration), saw the victory of the list led by American fund Elliott, a significant shareholder with an 8,8% stake and which today – with the decisive support of the CDP – it won 49,84% of the votes of the shareholders present at the appointment held at the Tim headquarters in Rozzano, representing 67,15% of the share capital.
First of all, 95% of those present voted in favor of a Board of Directors with 15 members: the 10 indicated by the winning list, i.e. in this case by the shareholders belonging to the US Elliott fund, and the first 5 of the loser list, i.e. the one indicated come on French companies of Vivendi, still majority shareholders with 23,94% of the capital, which collected only 47,17% of the preferences. The result is that the new board, which will be in office for the next two and a half years, will see Fulvio Conti as president, Amos Genish confirmed as managing director, and then Alfredo Altavilla, Massimo Ferrari, Paola Giannotti de Ponti, Luigi Gubitosi, Paola Bonomo , Maria Elena Cappello, Lucia Marselli, Dante Roscini, Rocco Sabelli, Arnaud de Puyfontaine, Marella Moretti, Michele Valsensise and Giuseppina Capaldo. The outgoing vice president, who directed the work of the assembly, Franco Bernabè, therefore remains out.
At the moment the protagonists have not commented on the outcome, but previously, during the interventions of the small shareholders, Vivendi had already hinted at its position through the words of the communication director, Simon Gilham: “We see no reason to reduce our holding. If Vivendi is defeated by Elliott (as it was later, ed) in the vote for Telecom's board of directors, it will continue to support Amos Genish and monitor the group's strategy and in particular against the dismantling. We will continue to be very vigilant to make sure that independent directors elected under Elliott do not push for Tim's dismantling,” Gilham said on the sidelines of the meeting.
For its part, after the victory of the list presented at the meeting, the US Elliott fund is now looking "to a constructive dialogue and careful consideration by Tim's board and management of Elliott's proposals for the creation of value, including the return of the dividend at the right time, evaluate alternatives for Netco (the network) after the legal separation and the conversion of the Savings shares”. This is what we read in a note from the US fund, which confirms the total support to Amos Genish and to the entire management, explaining that they are completely in line with the industrial plan presented by Genish.
The reaction of the markets, already negative in the hours immediately preceding the vote, was confirmed as tepid even after the official result: on a positive day for the Ftse Mib, initially the Telecom Italia share was among the worst, with a loss which in the afternoon was still around 1%, at 0,829 euro per share but which then decreased, so much so that the stock closed with a 2% increase, higher than the market average. The vote of small shareholders and presumably of Cassa Depositi e Prestiti, which holds 4,93% of the share capital, was decisive for the victory of the Elliott fund.
Also significant for understanding how the Cassa, majority-controlled by the Ministry of the Economy, voted is the tweet referred to Tim of the Minister of Development, Carlo Calenda: “Stock market performance aside, it is important that it becomes a real public company, that conflicts of interest with shareholders (the reference seems to be to Vivendi, ed) no longer damage it and that it accelerates on net separation. We will monitor closely." And the legal separation of the fixed network is, not surprisingly, one of the cornerstones of Elliott's plan.
That CDP has sided with the American fund has aroused the ire of the French. Elliott's victory “was not decided by the market” but “by the fact that Government-controlled CDP has voted for a hedge fund American rather than for a long-term industrial partner”, Simon Gillham intervened again, thus assuming that the CDP supported the Americans. “We are surprised by this. We wonder how a government-controlled shareholder with public money can vote for a short-term US hedge fund that hedges its share and that therefore it is not here for the long term”Gillham added.
