Elliott Sets Out Its Telecom Italia Goals in Shareholder Letter
March 16 2018 - 5:08AM
Dow Jones News
By Sarah Sloat
Activist fund Elliott Advisors' push for management changes at
Telecom Italia SpA (TIT.MI) is motivated by the company's strategic
missteps, poor share performance and corporate conflicts of
interest, the fund wrote in a letter to shareholders Friday.
On Thursday, Telecom Italia said the fund proposed replacing six
board members in a shake-up that would remove managers nominated by
Vivendi SA (VIV.FR), including Chairman Arnaud de Puyfontaine.
According to Elliott Advisors, the U.K. arm of Elliott
Management, it currently holds more than 5% in ordinary shares of
Telecom Italia, comprising financial instruments and a direct stake
of more than 3%.
"Poor stewardship under the Vivendi-controlled board has
resulted in deeply troubling corporate-governance issues, a
valuation discount and strategic failures," Elliott said, calling
share-price underperformance "profound and persistent."
In addition to replacing board members installed by Vivendi,
which holds almost 24% of Telecom Italia, Elliott wants the Italian
company to sell part of its network operation NetCo, dispose or
sell part of subsea cable unit Sparkle, reduce leverage and resume
dividend payments.
"Telecom Italia is uniquely positioned in the Italian market and
operates an outstanding collection of assets that, if properly
managed, should produce substantial, consistent returns for its
shareholders while providing a vital, high quality public service,"
Elliott said.
Elliott proposed the new board appointments as part of the
agenda for Telecom Italia's shareholders meeting, set for April
24.
Write to Sarah Sloat at sarah.sloat@wsj.com
(END) Dow Jones Newswires
March 16, 2018 04:53 ET (08:53 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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