Vivendi Fights for Telecom Italia Board Seats Ahead of Vote

  • French investor said to be open to increasing its stake
  • Campaign for board seats to face opposition at meeting Tuesday

Vivendi SA is stepping up a fight to gain board seats and influence at Telecom Italia SpA, seeking to block the Italian carrier’s attempt to dilute its stake and not ruling out an increase in its holding, according to people familiar with the matter.

The French media company’s campaign to gain four seats at Tuesday’s shareholder meeting is set to face opposition from a group of Italian investors. To put pressure on Telecom Italia, Vivendi said it’ll abstain from voting on a management proposal that would dilute its holding.

The meeting has been scheduled for 11 a.m. in Rozzano, near Milan. Vivendi’s proposal to enlarge the board to 17 members from 13 and the saving shares’ conversion plan are on the agenda. Vivendi Chief Executive Officer Arnaud De Puyfontaine will represent the French company, according to a Milan-based spokesman.

Vivendi said Monday it purchased an additional 56 million Telecom Italia common shares, or about 0.4 percent, bringing its total stake to 20.5 percent. Down the road, Vivendi is open to raising its Telecom Italia stake to near 25 percent as billionaire Chairman Vincent Bollore seeks more control over the phone company’s strategy, the people said, asking not to be named discussing private deliberations.

Bollore has built up Vivendi’s stake in the phone company over recent months with the goal of divesting assets and potentially playing a part in the long-run in pan-European telecommunications consolidation, people familiar with the matter have said.

To fight back, Telecom Italia representatives have been rallying shareholders to block Vivendi’s attempt to gain board seats, people familiar with the matter said. To get the seats, Vivendi needs the support of a majority of votes present at the meeting.

A Vivendi representative declined to comment. A representative for Telecom Italia referred to a statement Saturday in which it acknowledged Vivendi’s intention to abstain from voting on a resolution calling for the conversion of savings shares into ordinary shares.

French Billionaires

Bollore isn’t the only French billionaire angling for influence at Telecom Italia. Xavier Niel, the founder of broadband provider Iliad SA, has acquired securities equivalent to a holding of about 15 percent in Telecom Italia through his personal investment company. This month, JPMorgan Chase & Co. also boosted its stake and owns a holding equivalent to 10.1 percent.

Until earlier this year, Italy’s largest phone company had been controlled by Spain’s Telefonica SA and a group of Italian financial investors. Their replacement by the two French shareholders comes as Telecom Italia Chief Executive Officer Marco Patuano seeks to revive the company’s local business and sell assets to reduce a debt load of almost 27 billion euros ($29.6 billion).

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