Gloves come off in Vivendi battle for Telecom Italia

Vivendi and activist investor Elliott Management are now engaged in a battle over the future of Vivendi’s management of Telecom Italia (TIM).

Elliott, which now has control of over 5% of TIM’s stock, holding about 3% by itself and controlling other shares through financial instruments, has written an open letter to TIM shareholders accusing Vivendi of exercising disproportionate control over the telco, despite holding less than 30% of the company’s voting shares. Elliott said that Vivendi had managed TIM in its own interests to the detriment of minority shareholders.

Elliott has called for the separation of the network arm of the operator and the whole or partial sale of submarine cable arm Sparkle to pay down debts and restore the payment of a dividend.

The hedge fund has called for the removal of Vivendi board appointees Arnaud de Puyfontaine, Herve Philippe, Frederic Crepin and Giuseppe Recchi and Vivendi’s two independent nominees, Felicite Herzog and Anna Jones. In their place, Elliott has nominated former Enel CEO Fluvio Conti, BTP CFO Massimo Ferrari, former banker Paola Giannotti De Ponti, former Wind CEO Luigi Gubitosi, Harvard Business School professor Dante Roscini and private equity group Clessidra partner Rocco Sabelli.

Elliott is expected to submit more detailed plans for TIM soon, but shareholders will likely wait for detailed reports on the competing visions from independent advisers before taking a decision.