Telecom Italia chief to meet with Elliott after call for board shake-up
The chief executive of Telecom Italia will meet representatives of Elliott Management, the activist investor, in London on Friday as the company looks to defend its strategy.
Elliott has built a position in Telecom Italia, which is controlled by France’s Vivendi. It said this week that “governance, valuation, strategic direction and relationships with Italian authorities would be improved by replacing certain members of the board”.
Amos Genish, chief executive of Telecom Italia, argued that a board shake-up would not be in the interest of its shareholders and that he would resist any attempts to force the business to merge its Brazilian phone network with that of Oi, which he said is a likely motivation for Elliott’s move.
He also said that any move to force it to float its network, which is being split into a separately owned company, would be premature and risk antagonising its bondholders.
Telecom Italia has presented its own recovery plan for the next three years, which includes a resumption of dividend payments in 2019 or 2020. That payout would be jeopardised by any move to merge with Oi, which is in bankruptcy protection, according to Mr Genish, who said such a deal would be “extremely irresponsible”.
He said that the company’s growth plan has been developed after lengthy discussions with shareholders, who will vote on it at a meeting in April. “(Shareholders will have to decide) on the American hedge fund view — the sausage factory — or to take the serious industrial approach,” he said.
Elliott was unavailable for comment.