Telecom Italia CEO Said at Risk as Vivendi Seeks Revampby and
Patuano said to have met Vivendi executives in Paris
Vivendi said to become impatient with the returns at company
Telecom Italia SpA Chief Executive Officer Marco Patuano’s position is being reviewed by Vivendi SA because the French media company is becoming impatient with his leadership after investing about 3.5 billion euros ($3.8 billion) in Italy’s largest phone operator, people familiar with the matter said.
Patuano met Vivendi’s top management in Paris Wednesday to discuss strategy issues such as cutting costs, revamping its domestic business and options for Brazilian unit Tim Participacoes SA, said two people, asking not to be named because the discussions are private. Vivendi is pushing Patuano to transform the carrier into a media group with a distinct focus on southern Europe, two of the people said.
Vivendi CEO Arnaud De Puyfontaine has met with potential candidates to eventually replace Patuano if he doesn’t start driving the company in the direction that Vivendi Chairman Vincent Bollore wants, according to one of the people. No final decision on Patuano’s future has been made and the veteran Telecom Italia executive could keep his position, people added.
Representatives of Telecom Italia and Vivendi declined to comment.
Telecom Italia rose as much as 6.5 percent to 1.01 euros in Milan, giving the company a market value of 18.3 billion euros.
In February, Telecom Italia’s 19-member board added Bollore allies to its control and risk committee and its nomination and remuneration committee. Two months earlier Patuano’s proposal to convert savings stock into common shares was rejected by shareholders at a special meeting after being opposed by Vivendi.
The Italian former phone monopoly last year became the center of a fight for influence between Bollore, worth $4.4 billion according to the Bloomberg Billionaires index, and French entrepreneur Xavier Niel -- worth $8.5 billion -- who bought a stake equivalent to 15.1 percent through his personal investment company. Niel, the founder of broadband provider Iliad SA, holds financial instruments that don’t yet carry voting rights.
Vivendi has been buying Telecom Italia stock for months and owned 23.8 percent as of Feb. 29.
Patuano is also under pressure from analysts at Moody’s Investors Service, which questions Telecom Italia’s ability to return to earnings growth or cut debt in coming years. The ratings agency said last month it may downgrade Telecom Italia’s bonds further into a speculative credit rating.