Telecom Italia gets new Chief Executive but power struggle rages on
INTERNATIONAL - Luigi Gubitosi’s appointment as Telecom Italia’s new chief executive lifted shares more than 4 percent on Monday as investors bet the veteran Italian manager could push through an aggressive shake-up of Italy’s biggest phone group.
However, the change has not ended the battle raging at Telecom Italia between activist investor Elliott and French media group Vivendi which remains the largest shareholder and voted against Gubitosi.
A former head of telecoms group Wind and now state-appointed commissioner of struggling airline Alitalia, Gubitosi succeeds Amos Genish, the third TIM chief executive to leave in as many years, who was unexpectedly fired last Tuesday over what sources said were disagreements with board members over strategy.
Telecom Italia (TIM) shares rose 4.4 percent by 0940 GMT, outperforming a 0.7 percent rise in Europe’s telecoms index.
“The exit of Genish and the appointment of Gubitosi add speculative appeal but also strategic and governance uncertainty,” Banca Akros said in a note.
Gubitosi was appointed to the TIM board after a boardroom coup in May in which Elliott wrested control from Vivendi.
The former Merrill Lynch banker is expected to pursue the activist agenda proposed by Elliott, which included the spin-off of TIM’s network infrastructure and its merger with smaller, state-backed broadband rival Open Fiber, asset sales and a conversion of its savings shares.
However, Genish, who had been pursuing a three-year turnaround plan, remains on the board and is determined not to give up without a fight.
He said on Sunday he would seek to call a shareholder meeting to have investors decide on the drastic change in strategy.
Vivendi voted against Gubitosi, a spokesman for the French investor said, adding it would be up to shareholders to decide what is the right board to roll out TIM’s future strategy.Reuters