Ferrari Ex-Boss Said to Be Telecom Italia Chairman Candidate

Updated on
  • Chairman Recchi could be replaced in board reshuffle in May
  • Montezemolo set to step down from Alitalia after plan approval

Former Ferrari SpA Chairman Luca Cordero Di Montezemolo is a leading candidate to replace Giuseppe Recchi as the head of Telecom Italia SpA’s board in May, people familiar with the matter said.

Montezemolo could be nominated by Telecom Italia’s largest shareholder, Vivendi SA, as part of a plan that would grant more power to the phone carrier’s chief executive officer, Flavio Cattaneo, said the people, who asked not to be named as the matter is private. Vivendi is still weighing options for Telecom Italia’s new board and Recchi has a chance to stay on, the people said.

Montezemolo, 69, is currently the chairman of Alitalia SpA, and is planning to leave that role after the funding for a new restructuring plan at the struggling airline is approved by investors. He’s also vice chairman at UniCredit SpA, Italy’s biggest bank. Cattaneo, 53, was previously the CEO of Montezemolo’s high-speed rail company NTV, and was credited for turning around the business during his yearlong tenure. While he has extensive relationships in Italy, Montezemolo hasn’t led a phone company.

"Montezemolo certainly isn’t an expert in telecommunications and digital, as his history shows," Fabio Troiani, managing director at consulting firm Business Integration Partners in Milan, said in a phone interview. It makes sense to consider him because his interpersonal may help the company restore a good relationship with Italian government, Troiani added.

Telecom Italia investors have until April 9 to file board-slate proposals ahead of the company’s May 4 annual meeting. Vivendi may seek to oust Recchi as part of a proposal that would turn the executive chairman role into a non-executive position, people familiar with the matter said this month. That would effectively boost the position of Cattaneo, who became Telecom Italia’s CEO with the backing of Vivendi last year.

Representatives of Vivendi and Telecom Italia declined to comment. Montezemolo said he hasn’t been approached, according to Italian newswire Ansa. 

Shares of Telecom Italia declined as much as 0.5 percent before reversing course. The stock was up 1.5 percent at 84.7 cents at 5:35 p.m. in Milan.

Cattaneo has overseen a significant recovery in Telecom Italia’s main domestic operations since arriving one year ago with Vivendi’s support, trimming costs and starting to wring more revenue from its investment in broadband services. By rewarding Cattaneo with more power, Vivendi Chairman Vincent Bollore can strengthen his own clout at Italy’s former phone monopoly.

Montezemolo has been a prominent figure in Italy for more than three decades. He ran Ferrari for 23 years before being ousted by Fiat Chrysler CEO Sergio Marchionne in 2014 amid clashes on strategy and poor performance of its Formula One team. Montezemolo helped orchestrate Etihad Airways’ investment in Alitalia and was named chairman of the carrier in 2014. As Etihad’s plan to revamp the Italian carrier has sputtered, Montezemolo this month announced his intention to leave.

(Updates with analyst’s comment in fourth paragraph.)
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