Telecom Italia (TIM) Chairman Salvatore Rossi will not seek another mandate as head of the former phone monopoly’s board when his stint ends next year, the executive told Reuters on Wednesday, confirming an earlier source-based report.
Rossi’s decision comes after TIM approved a 19-billion euro sale of its prized fixed-line grid to U.S. fund KKR, a move opposed by TIM’s top investor Vivendi, which is expected to challenge it in court.
Rossi, a former senior official at the Bank of Italy, is set to inform directors of his plans on Thursday, according to a source briefed on the matter.
Rossi, 74, has chaired TIM’s board since 2019. Vivendi has clashed with him over corporate governance issues on a number of occasions and has repeatedly sought to replace him.
The outgoing board, whose three-year mandate ends next year, will kick off the process to draft a slate of candidates for shareholders to vote upon at the company’s annual meeting in April, the sources added.
Under such a plan, TIM CEO Pietro Labriola could be included in the slate to win another mandate, sources have previously told Reuters. Labriola has already said he is available to continue to serve as TIM CEO.
The French media giant, which holds a 24% stake in TIM, does not have any seats on TIM’s board. Italian state lender CDP, which is the second-largest investor, holds one seat.
Championed by Labriola as a landmark deal to lighten the company’s debt pile and backed by Italy’s government, the grid sale was branded unlawful by Vivendi, which was seeking a higher price and had been demanding a shareholder vote on the deal.
Vivendi is expected to file a complaint with a Milan court to challenge the sale on Friday, according to two other sources who declined to be named as deliberations are private.
TIM shares ended Wednesday down 3.7%, the worst performer on the Italian blue-chip index, with traders citing uncertainty linked to Vivendi’s stance on the deal.
In Vivendi’s view, shareholders disagreeing with the grid deal should be compensated and the finalisation of the deal should be suspended until judges decide on the case, according to the sources.
TIM had said that the board, which last month approved the grid sale with 11 out of the 14 directors attending the meeting voting in favour, acted within its rights. The company expects to finalise the deal by the summer. Reuters