Report: Vivendi CEO meets potential replacements for Telecom Italia chief Patuano

Vivendi is reportedly considering kicking out Telecom Italia's CEO Marco Patuano just days after the French media group increased its stake in the Italian operator to 23.8 per cent.

The French company's CEO Arnaud De Puyfontaine has already met with potential replacements for Patuano in an apparent bid to push the Telecom Italia chief to toe the line in terms of Vivendi's future strategy for the operator, Bloomberg reported.

Vivendi has so far invested around €3.5 billion ($3.8 billion) in Telecom Italia and is nearing the 25 per cent threshold that would require it to launch a full takeover bid under Italian law. However, its intentions have remained unclear, with Vivendi recently shooting down speculation that it was preparing the way for a merger with Orange.

Citing "people familiar with the matter", Bloomberg reported that Vivendi is trying to get rid of Telecom Italia's Brazilian business and turn the firm into a southern-Europe-focused media group. Vivendi chairman Vincent Bollore is losing patience with Patuano's failure to take the operator in that direction, the news agency added.

After the report, Telecom Italia's shares rose 6 percent on the Milan stock exchange. It continued to rise on Friday, after it emerged that Argentina's telecoms regulator had approved Telecom Italia's sale of its controlling stake in Telecom Argentina to the investment company Fintech for $960 million (€874 million).

In February, Telecom Italia said its preliminary 2015 EBITDA was down 20 per cent year-on-year, and revenue down 8.6 per cent.

The company's debts also had also grown to €27 billion, but it announced a strategic plan for the next two years that involves €12 billion worth of Italian investments. The bulk of that money will go towards fibre broadband and LTE mobile broadband.

That strategy update also called for the "strengthening" of the group's multimedia entertainment drive, but with little detail. According to Telecom Italia's results, "media and other assets" accounted for just 0.7 per cent of revenues in 2015, and just 0.2 per cent of capital expenditure.

Vivendi became Telecom Italia's largest shareholder last June, and since then it has been gradually upping its stake and fighting for more influence in the company. It won a battle against minority investors in December, taking seats that gave it control over around a quarter of the board.

For more:
- see this Bloomberg report
- view Telecom Italia's preliminary earnings statement

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