Vivendi CEO Tops Company's List to Lead Telecom Italia BoardBy
Current Chairman Recchi included in the list by French company
Vivendi seeks a clear majority in the board of Telecom Italia
Vivendi SA, the largest investor in Telecom Italia SpA, placed its own chief executive officer atop a list of proposed candidates for the Italian phone carrier’s board, suggesting it plans to replace the current chairman, Giuseppe Recchi.
The significance of Vivendi listing Arnaud De Puyfontaine, its CEO, above Recchi among the 10 candidates it’s proposing for Telecom Italia’s 15-member board, wasn’t explained in a statement released on Sunday announcing the board candidates. Typically for Italian companies, the first name is used to indicate the nominee for chairman.
Vivendi, which owns 24 percent of Telecom Italia and currently has four directors, is using the board-nomination process to firm up its grip on Italy’s former phone monopoly. The French media company, led by billionaire Chairman Vincent Bollore, has asked the European Union for permission to exert “de facto” control over Telecom Italia as Bollore strives to create a media-telecommunications empire with a focus on southern Europe.
Bollore’s surprise tactics often keep investors and executives guessing. While Recchi’s name is also on the list, Vivendi’s plans for his ongoing role at Telecom Italia aren’t clear. Recchi is listed fourth among Vivendi’s candidates, behind De Puyfontaine, Vivendi Chief Financial Officer Herve Philippe and a new addition, Vivendi General Counsel Frederic Crepin.
Vivendi has thrown an additional wild card into the mix, proposing the former Telecom Italia CEO Franco Bernabe as a new independent board member at Telecom Italia. Bernabe’s presence would give Vivendi an ally who knows the company and Italian telecom industry well.
Telecom Italia’s current CEO, Flavio Cattaneo, said April 5 he would remain with the company no matter who was appointed as chairman by investors at the May 4 annual meeting. He was renominated to the board as expected.
Vivendi’s push to exert more control over Telecom Italia involves gaining a clear board majority, people familiar with the matter said last week. The company’s proposal would reduce the number of directors by one from 16 currently. Five seats are nominated by Italy’s investment fund association Assogestioni. Vivendi needs a majority of votes at the May meeting in order to get two-thirds of seats on the board.
Bernabe, 68, resigned as CEO of Telecom Italia in October 2013 after clashing with former top shareholders including Telefonica SA over his attempt to boost capital and over the company’s strategy in Brazil. Bernabe, who also served as CEO of Italy’s biggest oil company, Eni SpA, is now chairman of Istituto Centrale delle Banche Popolari Italiane SpA.
Bernabe’s contacts in Italian politics and his familiarity with the process may prove to be an asset to Vivendi as it navigates regulatory challenges, said Andrea Giuricin, a professor at Milan’s Bicocca university who specializes in telecommunications and transportation.
Vivendi “needs to build a better relationship with the Italian government and to overcome regulatory uncertainty that is limiting the price of Telecom Italia shares," Giuricin said in a phone interview Monday.
Italy’s communications regulator is reviewing Vivendi’s holdings in both Telecom Italia and Silvio Berlusconi’s Mediaset SpA to see if they meet competition rules. Vivendi is likely to face a rebuke from the regulator, known as AGCOM, for buying a stake in Mediaset and violating the regulations, people familiar with the matter said April 6.
Telecom Italia fell less than 1 percent to 80 euro cents at 9:31 a.m. Monday in Milan. The shares have declined 3.9 percent this year
— With assistance by Tommaso Ebhardt