Telecom Italia said on Monday that its CEO Marco Patuano has handed in his resignation, which will become effective subject to the relevant approvals of the terms and conditions.
The announcement came hours after the Italian operator said it was in "advanced negotiations" over the departure of Patuano from the group. While Telecom Italia has provided few further details, the move is largely being attributed to the CEO's clash with the company's biggest investor, Vivendi, over the Italian operator's strategy.
Citing unnamed sources, Bloomberg reported that Flavio Cattaneo, CEO of high-speed train operator Nuovo Trasporto Viaggiatori and a member of Telecom Italia's board, is at the top of the list of possible replacements. Other potential candidates include Luigi Gubitosi, who headed Wind Telecomunicazioni, the report said.
The Financial Times suggested that Patuano could receive a €7 million ($7.9 million) payout when he departs.
Patuano's future as CEO of Telecom Italia had appeared increasingly in doubt over recent months. According to reports, he has been under growing pressure from Vivendi chairman Vincent Bollore, who is said to be in favour of selling Brazilian unit TIM Participacoes and focusing on southern Europe.
Earlier in March, Patuano said that he had never been asked to sell TIM Participacoes and that he continued to believe in Brazil as a strategic market for the Italian operator.
Bollore's patience may well have been further tested by the fact that although the company generated a profit of €657 million in 2015, the proportion of that income attributable to Telecom Italia's parent company shareholders -- which the company reports as its consolidated net profit/loss -- fell from a €1.3 billion profit in 2014 to a loss of €72 million in 2015.
In February, Telecom Italia 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.
Vivendi became Telecom Italia's largest shareholder last June, and since then it has been gradually increasing its stake and fighting for more influence in the company. It now holds a stake of 24.9 per cent, which is just below the 25 per cent threshold at which it would be forced to launch a takeover bid.
For more:
- see this Telecom Italia statement
- see this Bloomberg article
- see this Financial Times article
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Report: Vivendi CEO meets potential replacements for Telecom Italia chief Patuano
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Article updated March 21 to include Telecom Italia's confirmation of its CEO's resignation.