French media conglomerate is largest single shareholder in the Italian operator
Arnaud De Puyfontaine, CEO of Vivendi (pictured), has resigned from Telecom Italia’s (TIM) board with immediate effect. The French media conglomerate Vivendi is the largest single shareholder in the Italian operator with 23.75%.
In recent years, TIM’s board board has mostly been at loggerheads as waves of plans for consolidation and other strategies have ebbed and flowed, and board members including CEOs have been forced out.
Nationalisation not consolidation
Currently TIM is engaged in complex negotiations with the Italian government, investors and potential investors, about the future ownership of some parts of or the entire operator.
Mostly the conversation now is around merging FiberCop, the entity that owns TIM’s fixed access network, and its international infrastructure unit, Sparkle.
Previously FiberCop was supposed to merge with competitor Open Fiber but this fell apart last November when Italy elected a new government with different ideas. The government wants a state-owned, national, high-speed fibre infrastructure but is not of the opinion this must necessarily be supplied by a single, consolidated provider and network.
What’s the net worth?
There are disagreements about strategy and valuations. Vivendi thinks that FiberCop is worth €30 billion if it is sold off, whereas some board members and the state-backed lender Cassa Depositi e Prestiti (CDP), which is the second largest shareholder in TIM with just under 10%, reckons its value is a lot closer to €18 billion – rather a large difference of opinion which has resulted in yet another boardroom stalemate.
In a statement, TIM says, “in this phase of constructive dialogue between TIM’s main shareholders and the institutions, under the new government’s leadership, it is fundamental that all the relevant parties may be free to work in a constructive and transparent manner to the benefit of TIM and all its shareholders”.
Target is TIM’s growth
Also that De Puyfontaine “considers it appropriate to devote his effort, as chief executive officer of Vivendi, to re-establishing a growth path for TIM and see to it that the real value of the company and its unique network is properly recognised”.
Apparently De Puyfontaine confirmed that “TIM and Italy remain central to Vivendi’s investment plans”. This sounds like the start of an epic battle of wills over the future of TIM and the value assigned to its different operations.
There is little detail around De Puyfontaine’s abrupt departure. It could be he feels it could smooth the way in the negotiations – certainly the French company’s different priorities have long stoked resentment and dissent in TIM’s boardroom.