Telecom Italia CEO Ousted As Elliott Lands Blow

Telecom Italia’s (TIT.MI) board has ousted Chief Executive Amos Genish with immediate effect, the company said Tuesday, the culmination of a monthslong tussle between its two main shareholders, Vivendi SA (VIV.FR) and Elliott Management Corp.

Mr. Genish was the second chief executive to guide the company in little more than a year. Last summer, Flavio Cattaneo resigned after relations with Vivendi soured, having held the top position for about a year.

The president of the board, Fulvio Conti, will take over in the interim and a board meeting has been called for Sunday to choose a new CEO, Telecom Italia said.

Vivendi and Elliott have been at odds for months regarding Telecom Italia, with Elliott pushing for strategic changes at the company. In spring, Elliott took control of the board. Mr. Genish, who was appointed by Vivendi, appeared until recently to have Elliott’s support.

“Mr. Genish was supposed to be OK both for Vivendi and Elliott,” Alexandre Iatrides of financial-services group ODDO BHF said. “I think we’re watching another event of war between the two and, in that sense, Mr. Genish is the fuse [for this event].”

Separately, Telecom Italia on Tuesday defended itself against recent comments by Vivendi, which last week criticized the Italian company’s 2 billion euro ($.2.28 billion) writedown in the third quarter.

“The need to proceed with these writedowns is not attributable to disorganization on the part of the company or to failures in the new governance, as Vivendi insinuated, but to measures implemented by Amos Genish [appointed by shareholder Vivendi] that can be drawn back to strategic choices made by shareholder Vivendi,” Telecom Italia said.

The company called on Vivendi and others to “cease making further false and misleading announcements,” which it said damaged shareholders.

Telecom Italia’s share price has shed about 25% of its value year-to-date, and more than 50% in the past three years. At 1403 GMT, the share traded at EUR0.53, up 0.3%

Activist fund Elliott has been waging corporate battles around the world which have affected companies spanning sectors from manufacturing to asset management. – Market Watch