Italy Finds a Friend in U.S. Hedge Fund
State-controlled lender helped Elliott take charge of Telecom Italia. Rome is interfering with a private company to get hold of a prized asset.
Italy is playing fast and loose with property rights and no one seems to care.
Photographer: Federico Bernini/BloombergA corporate battle at Telecom Italia SpA shows why it’s tough to be an investor in Italy these days. The government is interfering with a private company to get hold of its most prized asset: the country’s phone and broadband network. The opposition tacitly supports the plan. Italy is playing fast and loose with property rights and no one seems to care.
The ruling Five Star Movement has presented a draft amendment to a fiscal decree, which envisages creating a single company to combine the networks of Telecom Italia and Open Fiber, a smaller rival. Luigi Gubitosi, who became Telecom Italia’s CEO at the weekend, is open to the plan. It’s also supported by Elliott Management Corp., a hedge fund from New York that’s in effective control of Telecom Italia. Populists can embrace some strange bedfellows.