The open war between Vivendi and Elliott over Telecom Italia is heating up. Two weeks after the meeting of 24 April and on the day on which the Tim's board has decided to take legal action of urgency against the choice of the supervisory board of integrate the agenda of the meeting of 24 April as requested by the American fund (reaffirming the validity of the meeting of 4 May), the vehicle driven by Paul Singer announces that it has increased its stake in the Italian company to 13,73%. In the evening, then, Assogestioni announces that it has unanimously decided not to present its own minority list. A completely unusual fact: the votes of the Funds will therefore be free to adhere to the lists already presented and the first adhesions are rewarding the one presented by the Paul Singer fund.
ELLIOTT RISES IN THE CAPITAL OF TIM
In detail, according to what was reported by Reuters, in a dossier presented to the Sec - the Securities and Exchange Commission which supervises the American Stock Exchange - Elliott announced that it has reached 8,8% of Telecom Italia's ordinary capital . Not only that, call and put options for a further 4,9% of the ordinary share capital must be added to the stake held by him. The total package therefore amounts to 13,7%. The news is also confirmed by Ansa.
The fund also explains that the position in the Italian telecom was built with the assistance of JP Morgan Securities. It should also be remembered that Elliot also holds 169,53 million savings shares, equal to approximately 2,8% of savings capital.
ELLIOTT RECEIVES ISS AND FRONTIS ENDORSEMENT
Important news that further complicate the position of Vivendi, currently holding 23,9% of Telecom Italia's capital. The endorsements received by Elliott in recent days also worry the French.
After Glass Lewis also the proxy advisor ISS, the other major advisor to the funds in the shareholders' meetings of listed companies, suggests Tim's shareholders vote for the dismissal of Vivendi's directors and their replacement with those proposed by the US fund: "At this point Vivendi represents more of a liability than an asset for Tim", write the experts of ISS, underlining that the company led by Vincent Bolloré has not brought stability to the governance of the Italian operator which has had "three CEOs in two years and problems with the regulators”. Furthermore, “the worsening relationship with the Italian government and the ever-present conflict of interest and having a media company as a de facto controlling shareholder has apparently restricted Tim's strategic alternatives, all of which go towards supporting of Elliott candidates,” Iss explains.
But be careful, because if on the one hand Iss recommends voting in favor of the 6 directors proposed by Elliott, on the other it sides with la ratification of the appointment of CEO Amos Genish to the board. In fact, the consultant notes that "Elliott does not ask for the replacement of Genish" and in any case "Iss recommends supporting his appointment".
In the afternoon, Frontis Governance is also in favor of Elliott recommending voting for activist fund candidates in the vote to be held at the April 24 assembly.
STOCK EXCHANGE: TELECOM REDUCES LOSSES
The numerous news that emerged during the day and the expected decisions of the Telecom Italia board of directors necessarily had repercussions also on the performance of the stock at Business Square. At 15.27 the shares reduced the red accumulated over the previous hours (at the opening the loss amounted to around 5%) and are currently down by 0,2% to 0,851 euro. It should be emphasized that in the sessions of 5 and 6 April, Tim had carried out a mini-rally which led to a rise in the stock of more than 12% in the wake of theCDP announcement, which has announced its intention to enter the shareholding structure of the TLC giant, by purchasing a share of approximately 5% of the capital.
ELLIOTT CLEARS HIS PLAN
The US activist fund has clarified its TransformingTim project. On the specially dedicated site you can in fact read some Power Point tables in which Paul Singer attacks the management of Vivendi, explains that he does not want control of the Italian telecommunications company, which intends to support the current Ad Amos Genish and promises to be able to double the value of Tim's shares in two years, bringing it to 1,6 euros from the current 0,80 euros. The pillar of his plan for Tim is the separation of the network with the creation of Netco which could free up to 7 billion of hidden value.
The value attributed to the network travels in a range between 21 and 25 billion. The model is that of Rab as for Terna, Italgas and Snam with a value of the net capital invested for regulatory purposes which is recognized a remuneration based on certain parameters set by the Authority. The next step is the merger with Open Fiber as there is no point in competing with two separate networks. In conclusion, Elliott thinks "that a constructive approach with the Italian government and the Authority will allow Tim to maximize the value of his assets and to act in the interest of all shareholders".
(Updated at 18:23 (Monday, April 9)
