Italy’s CDP opposes major management changes in TIM boardroom row – sources

FILE PHOTO: Telecom Italia's logo for the TIM brand is seen on building roof downtown Milan
FILE PHOTO: Telecom Italia's logo for the TIM brand is seen on building roof downtown Milan, Italy, May 20, 2016. REUTERS/Stefano Rellandini/File Photo

November 9, 2021

MILAN (Reuters) – Telecom Italia’s (TIM) second-largest investor CDP doesn’t want major management changes at the former phone monopoly as its top shareholder Vivendi calls into question the role of CEO Luigi Gubitosi, three sources close to the matter said.

TIM board members will face off this Thursday over plans outlined by Gubitosi to reorganise the group and extract more value from its assets, including the key landline grid.

The extraordinary board meeting has been requested by Vivendi’s representatives on TIM’s board of directors, Arnaud de Puyfontaine and Frank Cadoret, alongside three independent members.

Cassa Depositi e Prestiti (CDP) wants this week’s board meeting to discuss strategies to revamp TIM rather than governance issues, on which it would possibly talk at a later stage, one of the sources said.

TIM and CDP declined to comment.

Vivendi, which holds a 24% stake in TIM, has expressed disappointment over TIM’s performance following two profit warnings in three months.

In demanding a change of course at Italy’s largest telecoms company, the French group wanted to act in agreement with the Italian government, sources have said.

Treasury-controlled CDP owns a 9.8% stake in TIM and holds one board seat out of fifteen.

Vivendi, which backed Gubitosi’s second term as CEO together with CDP in March, does not control the company’s board, which has a majority of independent members.

Gubitosi’s reappointment was originally part of a broader plan championed by the previous government to merge TIM’s whole access network assets with those of state-backed rival Open Fiber.

However, key figures in the current ruling coalition led by Prime Minister Mario Draghi, including Innovation Minister Vittorio Colao, have poured cold water on the plan, which envisaged TIM owning more than 50% of the new entity.

(Reporting by Elvira Pollina and Francesca Landini in Milan, Giuseppe Fonte in Rome; Editing by Mark Potter)