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CDP hoping for TIM ceasefire

29 Mar 2019

Italian state lender Cassa Depositi e Prestiti (CDP) is reportedly attempting to forge a truce between the feuding Telecom Italia (TIM) investors Vivendi and Elliott Advisors. Elliott won control of TIM’s board from Vivendi last year, allowing it to nominate ten of the 15-person board, but Vivendi is hoping to wrest back some control at a shareholder meeting today (29 March).

A report from Reuters says CDP, which has built up a stake of almost 10% in TIM in an effort to safeguard the state’s interests in the nation’s telecoms networks, is hoping to broker a deal between the two parties. Sources say the bickering between shareholders has hampered development at the telco and had a negative effect on its share price.

One of the main bones of contention is the future of TIM’s fixed network assets. Vivendi has proposed spinning the networks off into a separate unit which will still be controlled by TIM, while Elliott is in favour of a full separation, which could then be merged with another of CDP’s investments, Italian wholesale network operator Open Fiber.

Earlier this month Elliott issued a statement saying that shareholders have a clear choice in the vote, ‘a choice between stability and the continued recovery of company value, or a return to Vivendi’s poor stewardship with its broken promises, track record of prolonged and pervasive value destruction, and contempt for good governance’. Elliott claims that Vivendi’s interests are ‘visibly misaligned with those of fellow investors’ and with the health of TIM.

Vivendi, meanwhile, has claimed ‘irregularities in governance at Telecom Italia’ under Elliott’s watch, while it has raised questions over the true independence of the Elliott-nominated board members.

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