Telecom Italia’s (TIM) main shareholder Vivendi said on Sunday it would back a merger of the fixed-line networks of TIM and rival Open Fiber if conditions were right, while renewing its attack on U.S. activist fund Elliott.
Elliott, which owns just under 10 percent of TIM, is locked in a battle with Vivendi over how to re-launch the debt-laden firm after last year wresting control of its board from the French media giant.
In a series of slides, Vivendi said TIM’s fixed network was core to value creation, adding it would support a merger of Open Fiber with TIM if conditions were right from an operational, financial and regulatory standpoint and overseen by an independent board.
“Any potential decisions involving its ‘crown jewel’ assets must be taken with the utmost care and consideration,” it said. The future of TIM’s fixed network has been a bone of contention between the two investors with Elliott pushing for a merger and Vivendi reluctant to lose control.
Last week Luigi Gubitosi, an Elliott ally appointed CEO in November, presented TIM’s three-year strategy saying he did not rule out losing control of the group’s fixed-line network under a deal with Open Fiber.
Open Fiber is jointly controlled by utility Enel and state lender CDP which also holds a stake in TIM.
TIM’s shares have lost more than 30 percent since March last year, partially due to the governance battle between its top two shareholders.
Vivendi accused the Elliott-nominated board of having “led TIM into a precarious state.” An Elliott spokeswoman declined to comment.
Vivendi also said it was ready to support proposals in the long-term interest of TIM shareholders including alternative fixed network business models, non-core asset sales, capital structure simplification, and a resumption of dividend payment.
The two adversaries will again face off on March 29 when shareholders are asked to vote on Vivendi’s request to replace five board directors appointed by Elliott.―Reuters