Wanted: New Telecom Italia CEO With Experience in Media Industryby
Largest shareholder Vivendi seeking successor to CEO Patuano
Former media executive Cattaneo said to be top candidate
Telecom Italia SpA’s biggest investor, Vivendi SA, is looking for a new leader for the phone carrier to oversee a push into content and forge stronger ties with media companies in southern Europe.
Vivendi Chairman Vincent Bollore led the push to oust Telecom Italia Chief Executive Officer Marco Patuano and the French media company has been interviewing candidates since early this month. A leading contender is Flavio Cattaneo, CEO of Rome-based high-speed train operator Nuovo Trasporto Viaggiatori SpA, people with knowledge of the situation said. Former Deutsche Telekom AG CEO Rene Obermann has emerged as another potential successor, along with Luigi Gubitosi, who headed Wind Telecomunicazioni SpA, the people said.
The new leader needs to share billionaire Bollore’s vision of making Telecom Italia a crucial component of a media and telecommunications powerhouse offering phone and Internet access as well as TV shows, music, and movies. The CEO will also need the political and deal-making skills to navigate Italy’s power structure, while overseeing a French-led transformation that may include a stronger alliance with Silvio Berlusconi’s Mediaset SpA, as well as a sale of Telecom Italia’s troubled Brazilian unit.
“For the new chief, it’s more important to know the telecommunications business than politics -- though the person needs the ownership and authority to lead Telecom Italia’s turnaround,” said Andrea Giuricin, a professor at the University of Milano-Bicocca who specializes in media and telecommunications. The leader should focus on faster broadband services, cost cuts and debt reduction, he said.
Cattaneo used to run Italian broadcaster RAI and he sits on Telecom Italia’s board, giving him experience in the two industries Bollore is seeking to meld. He also used to lead power network operator Terna SpA. Cattaneo is well-connected to former prime minister Berlusconi’s inner circle, though isn’t close to current premier Matteo Renzi, Giuricin said.
Gubitosi likewise is a former head of RAI and has more hands-on telecoms management experience than Cattaneo, having run wireless carrier Wind from 2007 to 2011. He spent about two decades at Fiat SpA in various roles, including that of finance chief.
Obermann led Deutsche Telekom, Europe’s biggest phone company, for seven years before heading Dutch cable-television operator Ziggo NV. He joined private-equity firm Warburg Pincus LLC in 2014.
Cattaneo, Gubitosi and Obermann didn’t immediately return calls seeking comment.
Patuano, 51, stepped down Monday and his resignation will become effective as soon as Telecom Italia has approved the terms. Patuano may receive a 7 million euro ($7.9 million) payout, people familiar said. Large shareholders expressed full confidence in the board and Chairman Giuseppe Recchi, they said.
Vivendi and Patuano’s views differed on matters including the Brazilian unit, which Vivendi is open to selling, the people said. Patuano and his allies were more committed to staying in Brazil for the long term, people have said.
The CEO change is set to put Bollore, who has a record of activism, more firmly in charge as he presses Telecom Italia to cut costs and focus on southern Europe. As part of his plan to extend Vivendi’s reach, he is also discussing an exchange of shares with Italian media company Mediaset, people familiar with the negotiations said this month. Berlusconi, who controls Mediaset, said Monday Vivendi is interested in Mediaset’s content rather than buying the company.
Bollore has been upping the pressure on Patuano for months while steadily raising Vivendi’s stake in Italy’s biggest carrier to 24.9 percent. Telecom Italia shares have been on the rise since mid-February amid Bollore’s push, and gained 3.5 percent to 1.05 euros at 2:23 p.m. in Milan. Mediaset fell 0.2 percent to 3.76 euros.
Vivendi, which owns Universal Music and Canal Plus, lost patience with Patuano after investing about 3.5 billion euros, people familiar with the matter said earlier this month. In February, Telecom Italia’s 17-member board added Bollore allies to two key committees.
Patuano recently met Vivendi’s top management to discuss strategy issues such as cutting costs, revamping the domestic business and reviewing options for the Brazilian unit, Tim Participacoes SA, according to the people. Vivendi had been pushing Patuano to transform the carrier into a media group with a distinct focus on southern Europe.
Patuano, born in Alessandria, near Turin, joined Telecom Italia in 1990 after a degree in Finance at Bocconi University. He presided over an almost 60 percent increase in Telecom Italia shares. He sold the carrier’s stake in Telecom Argentina SA for $960 million and planned to sell a stake in tower unit Inwit.