Telecom Italia boss ‘ready to quit’ over activist
THE chief executive of Telecom Italia has said he will resign if activist hedge fund Elliott prevails this week in a power struggle with major shareholder, the French media giant Vivendi.
Amos Genish, a highly regarded telecoms veteran brought in by Vivendi to shake up Telecom Italia, told The Sunday Telegraph that his position would be “untenable” if Elliott succeeded in a finely balanced vote on Friday.
Elliott has proposed a new slate of non-executives to replace those appointed by Vivendi, arguing Telecom Italia is not being run in the best interests of independent shareholders.
The hedge fund has said that it wants Mr Genish to stay on, however, despite having suggested changes to his strategy including a potential sale of its broadband network.
Mr Genish said: “If the Vivendi slate does not get the majority of votes, because this is clearly the only slate to support our long-term industrial plan, I firmly believe my position as CEO would be untenable.”
The comments will be viewed as a blow to Elliott as it seeks to persuade wavering investors. While Vivendi’s outsized influence at Telecom Italia has raised governance concerns, Mr Genish won the support of 98pc of shareholders in a separate vote last week and his exit could trigger more instability for the company.
Francois Godard, an industry expert at Enders Analysis, said: “Elliott’s stand on Genish is a way to reassure other investors, in my view.”
Elliott has mounted an attack on Vivendi against a complex political backdrop. Vivendi is controlled by the billionaire Vincent Bollore, who was arrested in France last week on African corruption charges.
Mr Bollore is engaged in a long battle with Silvio Berlusconi, Italy’s former prime minister, after a media deal between them went sour. Vivendi’s control of Telecom Italia via a minority stake has drawn anger in Italy, and Elliott has proposed a slate of directors viewed as Berlusconi business allies.