Rumors about the fate of the fixed network and Sparkle bring Telecom Italia into the spotlight of Piazza Affari. By mid-morning, the company's stock on the stock market gained 2,4%, to 0,8056 euros, scoring one of the best increases on the Ftse Mib, which in the same minutes moved around parity.
The purchases of Tim shares were triggered by the new rumors about the aims of Elliott, the American fund that recently entered the capital of the TLC group with a share that is said to reach 6%, therefore higher than the minimum threshold (5%) to be able to present a list at the shareholders' meeting. According to the rumors that are chasing each other, the aggressive US fund would have even exceeded 6%, approaching a share of 10% if derivatives and other financial instruments are also taken into account. Just today, Thursday, the road show led by Amos Genish started and it is expected that the top management of the Italian group in its meetings with investors in London and in the USA also met the Elliott Fund.
According to financial sources cited by Il Sole 24 Ore, Elliott believes that Telecom should spin off and list both the network and the subsidiary of the submarine cables on the Stock Exchange. If they remained within the group, the reasoning goes, over time the two assets would lose value, because they need substantial investments.
In addition to the IPO road, Elliott is also studying the possibility of the entry of a public shareholder (read CDP), which would put an end to Tim's totalitarian control over the two companies.
This week, Telecom Italia's board of directors mandated CEO Amos Genish to proceed with the legal separation of the network. However, in the manager's plans, Netco will remain 100% controlled by Telecom Italia. Furthermore, during a conference call with journalists, Genish invited Elliott to study Tim's new business plan and to possibly write an alternative one to be submitted to the board and the assembly.
Telecom shareholders will meet on April 24 and on that occasion Elliott will have to clarify his intentions. According to rumors, the fund aims to revolutionize Tim's governance by ousting the five non-independent directors appointed by Vivendi. The list includes the president Arnaud de Puyfontaine (who is also CEO of the group led by Vincent Bolloré), the vice president Giuseppe Recchi, the CEO Amos Genish, the CFO Hervé Philippe and the chief lawyer Frédéric Crepin. To succeed in the turnaround, Elliott should team up with institutional investors, who hold three-quarters of the ordinary capital and more than 80% of the total capital.
Meanwhile, Elliott's moves have produced consequences on the Stock Exchange also on the Mediaset stock, which just before 11 started an upward movement of 6,74%, by far the best performance of the Ftse Mib. It seems that the purchases are fueled by the hopes of investors relating to the entry of the American fund into the capital of Telecom Italia, which could lead to the unblocking of the stalemate between Vivendi, Tim and Mediaset.
