Network game

16 March 2018 By Lisa Jucca Follow @LJucca

The activist fund wants to oust top investor Vivendi from Telecom Italia’s board and sell its network. A stand-alone telco backbone might attract a higher valuation and be able to shoulder more debt. However, success hinges on state-backed investor CDP’s readiness to chip in.

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Activist fund Elliott Advisors has written to other Telecom Italia (TIM) shareholders to explain its attempt to shake up the Italian telecom group, which has French media group Vivendi as its top investor with a 24 percent stake.

Elliott has proposed replacing six Vivendi-backed directors with experienced Italian executives. In its letter dated March 16, the fund accuses Vivendi of repeated corporate governance failures at TIM at the expense of other shareholders.

Elliott says a listing or partial sale of TIM’s fixed-line network would maximise value and reduce debt, boosting returns for all TIM shareholders.

The fund also believes that opening the network to a wider investor base would boost value and might hasten the creation of a single national network in Italy.

Telecom Italia shares were up 0.5 percent at 0.81 euros by 1500 GMT on March 16.

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