Telecom Italia Names Genish CEO After Boardroom Battle
Telecom Italia has named Amos Genish its CEO after a dramatic shareholder battle in which French media giant Vivendi lost control of the boardroom to US activist investor Elliott.
Formerly a senior executive at Vivendi, Genish took charge of the Italian phone incumbent last September and managed to secure the full support of the board for his appointment as CEO earlier this week.
The Telecom Italia (TIM) board also appointed Fulvio Conti as chairman. Conti was previously a management executive at Enel, the Italian state-backed energy company.
The appointments came after last week's boardroom clash between Vivendi, which owns a stake of about 25% in the Italian operator, and Elliott, a US hedge fund that has been able to amass almost 9% of Telecom Italia shares.
Elliott's proposal for an alternative set of directors secured 49.84% of shareholder votes, while Vivendi received 47.18% of votes. That outcome gave Elliott the right to name ten of Telecom Italia's 15 board members.
Elliott has complained about corporate governance at the operator and has reportedly indicated that it will look to negotiate the sale of Telecom Italia assets.
It appears to have an important ally in the Italian government, which recently bought a 5% stake in Telecom Italia through a Treasury institution called Cassa Depositi e Prestiti.
Various Italian authorities had seemed concerned about Vivendi's growing influence over such an important national asset. There have also been suggestions that Telecom Italia's fixed-line network could eventually be merged with broadband infrastructure that Enel is now building. Telecom Italia earlier this year approved plans for a "legal separation" of its fixed-line business that could facilitate such a merger in future. (See Telecom Italia to Spin Off Fixed Lines, Increase Automation.)
The shake-up evidently deals a blow to Vivendi, which had previously talked of developing a southern European media powerhouse that could challenge the likes of Netflix Inc. (Nasdaq: NFLX) in the market for digital content.
Telecom Italia's role in that vision was never entirely clear, although the operator has performed strongly in the last year and its share price is up nearly 18% in Milan since the start of 2018.
The operator seems to have made good progress on extending fixed and mobile networks into underserved areas and has unveiled ambitious targets for the digital transformation of its business. Group sales rose 4.2% last year, to €19.8 billion ($23.5 billion), thanks to an encouraging performance in both Italy and its overseas market of Brazil. (See Telecom Italia Molders as Shareholders Feud.)
The changing of the guard at Telecom Italia happened only days after setbacks for Bolloré Group, Vivendi's biggest single shareholder, which is under investigation for activities dating back to 2009 and 2010 in the African markets of Guinea and Togo.
CEO Vincent Bolloré was detained by authorities investigating allegations that Havas, one of the Bolloré subsidiaries, bribed African officials to secure port concessions. (See Ex-Vivendi Chairman Held By French Police Investigating Bribery Allegations.)
— Iain Morris, International Editor, Light Reading