French media group Vivendi has said it will abstain from a vote on the conversion of shares in Telecom Italia of Italy, in which it holds a 20.1% stake. The Italian firm’s board has already approved proposals to convert savings shares into ordinary stock, but Vivendi’s abstention is likely to derail the move, Reuters reports, with the conversion needing a two-thirds majority at a shareholder vote in order to proceed. The conversion of six billion savings shares would dilute Vivendi’s stake to around 14%, while Xavier Niel, another French investor who recently acquired call options in Telecom Italia, would see his own potential stake reduced from 15.1% to around 10%.
Telecom Italia Chief Executive Marco Patuano has labelled the current dual-share system as ‘entirely anachronistic’. Under the conversion proposals, the telco will offer one new ordinary share in return for each savings share tendered, plus a payment of EUR0.095 in cash. Stock not tendered would be compulsorily converted at a rate of 0.87 ordinary shares for each savings share.
Vivendi is looking to enlarge the board of Telecom Italia and install four of its own representatives, though the proposal could be blocked by other shareholders at the meeting later this week.