MILAN (Reuters) – Telecom Italia (TIM) (TLIT.MI) reappointed Amos Genish as chief executive on Monday, as the phone group enters a new phase after activist fund Elliott wrestled board control from top shareholder Vivendi (VIV.PA).
Elliott pulled off a boardroom coup at the former state monopoly on Friday, winning a shareholder vote to appoint 10 independent directors – or two-thirds of seats – to the board, loosening the grip of French media group Vivendi.
TIM said in a statement late on Monday the board had unanimously backed Genish’s reappointment and would support the CEO and his team in implementing the 2018-2020 business plan.
“I confirm my long-term commitment to the transformation of the group,” Genish said.
The 58-year old CEO is close to Vivendi but is also respected by Elliott, the Italian government and investors.
He had previously said he would only continue in his role if the new board backed his plan, which focuses on a digital transformation of the company, fixing its finances and getting back an investment grade credit rating.
In an earlier statement on Monday, Vivendi said it welcomed the appointment of Genish and reaffirmed its long-term commitment to TIM.
It said it would make sure the group’s plan was “coherently implemented in its entirety” and that measures taken to improve profitability continued.
Elliott launched its campaign to loosen Vivendi’s grip over TIM in March. It built a stake of 9 percent to try to shake up the way Vivendi – which owns 24 percent – runs it.
Elliott accused Vivendi, backed by French tycoon Vincent Bollore, of serving its own interests, while the French group said Elliott was only after short-term financial gains.
After becoming a shareholder in 2015, Vivendi gradually tightened its grip on TIM, appointing the majority of its board last year – all in the name of Bollore’s stated ambition of building a southern European media powerhouse.
The hands-on approach led to friction with politicians in Rome, concerned about a nationally important asset.
TIM said on Monday it had temporarily given its head of security, Stefano Grassi, powers to manage all assets deemed strategic for national security and defense.
Five of Vivendi’s candidates, including Vivendi CEO Arnaud de Puyfontaine, will be on the board, so the two sides will have to find a way to work together to help the company slash debt and become more competitive.
TIM said the new board had also appointed Fulvio Conti, a former TIM manager and CEO of state-controlled utility Enel (ENEI.MI), as chairman.
“Today, we have confirmed our full confidence in Amos Genish and his management team…,” Conti said.
De Puyfontaine, the previous executive chairman, was one of the board members who resigned in March, triggering the full board reshuffle.
Beyond asking for a governance shake-up, Elliott had called for the spin-off and partial sale of TIM’s soon-to-be-created network company, a conversion of savings shares, a return to dividends and potential asset sales – all moves TIM management had called premature, unfeasible and financially risky.
But recently the U.S. hedge fund has toned down its requests, saying it would be up to the new board and management to decide whether and when to carry out any such initiatives.
Editing by Mark Potter and Adrian Croft