Vivendi CEO Arnaud de Puyfontaine maintained pressure on Telecom Italia's management to appoint four Vivendi staff to the operator's board ahead of a key shareholders meeting this week.
The CEO said the French media company is willing to work with Telecom Italia's board to discuss the future strategy for the operator in the event that shareholders reject its bid for board representation at the meeting on Dec. 15. However, in an interview with the Wall Street Journal, de Puyfontaine also hinted that Vivendi is growing weary of Telecom Italia's resistance to its plan, which the media company believes is necessary to set the operator on a better strategic path.
Several Telecom Italia shareholders have expressed their opposition to the proposal to expand the operator's board from 13 to 17 members by appointing de Puyfontaine, Stéphane Roussel, Hervé Philippe and Félicité Herzog, the Journal noted.
Vivendi recently became Telecom Italia's largest shareholder, investing at least €3 billion ($3.2 billion) for a 20 per cent stake in the Italian operator.
The media company plans to abstain from a separate vote on a stock conversion plan that would dilute all shareholders stakes by around 30 per cent each. In Vivendi's case, the plan would reduce its stake to around 13 per cent, the Journal reported.
De Puyfontaine told the newspaper that Vivendi is not necessarily opposed to the conversion plan, but that the company believes the cash payment proposed is too low. Telecom Italia countered by explaining that it devised the plan with the help of external advisers, and that the terms are in line with similar moves by other companies.
The Journal noted that Vivendi's decision to abstain from the share conversion vote could see the proposal fail to achieve the two-thirds shareholder majority required to be passed.
De Puyfontaine told the newspaper that Vivendi would push Telecom Italia's board on its future strategy if its bid for seats and the share conversion proposal both failed. In the event that the conversion plan is approved, the media company would also be willing to compromise by accepting fewer than four seats on the board, he said.
Vivendi faces competition for any additional board places from French tycoon Xavier Niel, who has become the second largest shareholder in Telecom Italia after investing €225 million for a long option stake worth up to 15 per cent, Reuters reported last week.
Niel said he may seek a place on the board or propose strategies to Telecom Italia and its shareholder, Reuters noted.
Vivendi and Niel previously denied working together to take control of the Italian operator.
For more:
- see this Wall Street Journal article
- view this Reuters report
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