RomeThe power struggle at Telecom Italia comes to mind. After the appointment of a new executive director by the American hedge fund, Elliott, whose predecessor urges the rebellion of shareholders. The board of directors was summoned on Sunday, against the wishes of the main owner of France, Vivenda Luigi Gubitosi, in the main post. This suggests that the company faces more aggressive transformation than previously planned.
The appointment of former banker Merrill Linch represents the victory of Americans advocating a radical transformation in Telecom Italia and favoring the dominant spin-off of the Italian fixed line network. On the other hand, the French shareholder Vivendi, the largest shareholder with just under 24 percent, claims to retain control over the network after the sale of shares.
Now Gubitosi is following former Telecom Italia's chief of staff, Amos Genishi, who unexpectedly had to cancel his function on Tuesday. The background was a division of the corporate strategy, as people who are familiar with this issue said. As a result, several Elliott board members wanted Genish to focus more on outsourcing their fixed telephony business and sales jobs.
As early as April, 98 percent of shareholders supported Genish's restructuring plan, which focuses on digital transformation of the company and improvement of financial performance. Telekom Italia stood below the net debt of 25 billion euros and is confronted with increased competitive pressure, especially due to the entry of the French hunting cost provider Iliad to the market.
Genis still belongs to the governing board after his expulsion as the executive director. He is now trying to hold an extraordinary general meeting. This requires the support of five percent of the owners. Shareholders should make a fundamental decision about the forthcoming change of the strategy at the meeting.
After all, this is the division of Telecom Italia, Genish told reporters. Vivendi can support it according to information from a person who is familiar with the situation in his project. In the Steering Committee, the French company voted against Gubitosi, spokesman Vivendi said.