Attempts to unseat him and block the splitting out of the infrastructure into a NetCo failed, but opposition wins three board room places so the opera continues
At TIM’s general meeting yesterday, Pietro Labriola was confirmed a group CEO for another three years. The outgoing board secured more than 48% of the vote, which translates into six out of nine boardroom seats.
However, Merlyn Partners and Bluebell Capital Partners won two seats and one boardroom seat respectively. They oppose Labriola’s plan to split the telco into a ServCo and NetCo with the private fund KKR gaining control of the latter for €22 billion.
One of the two board members for Merlyn is Stefano Siragusa who helped the finance house draw up an alternative strategy to splitting the operator last year.
If things go to Labriola’a plan, the transaction will be completed in the summer, leaving the Italian Finance Ministry with a 20% stake. It is still to gain all the regulatory approvals but has the support of the Meloni Government.
The French connection
The French conglomerate Vivendi is TIM’s biggest shareholder with about 24% and also opposes the deal. Somewhat surprisingly, it abstained from the vote on boardroom appointments having issued a statement before the meeting saying, in effect, it is incumbent of on the new board to sort the mess out.
Vivendi does not have any representatives on the board.
Led by financier Vincent Bollorè, Vivendi has invested and lost €4 billion in TIM and the Italian company Mfe (formerly known as Mediaset) since 2015. Vivendi has argued that the KKR deal undervalues the infrastructure and the price should be closer to €28 billion.
However, Vivendi has stopped short of derailing the creation of the NetCo through the courts as it is widely seen as the only option to reduce TIM’s huge debts. As of the end of 2023, Vivendi’s stake was valued at €1.3 billion.
Not all going to plan
The embattled CEO is feeling the heat outside the boardroom too. Last month’s earnings report showed that TIM’s level of debt is not falling as fast as predicted.
The Financial Times [subscription needed] reported that in March, short sellers had netted €1 billion. Short sellers borrow shares to sell them, betting on the price falling so they can buy them back at a lower price and pocket the difference.
From the top
Labriola said in a statement after the general meeting, “Today’s Shareholder Meeting marks an important step forward in the plan we’re pursuing to put TIM back on a path of growth and development building on 22 months of improving performance and delivery of our financial objectives.
“This is a new phase in a journey whose objective is to seize all the opportunities that will arise as the market evolves. Indeed, we’re convinced of the need to provide the Company with a more robust financial structure, strategic options and a leaner organisation clearly focused on our business areas.
“Over the next three years we will work to ensure sustainable growth for the Group in the interests of all our stakeholders and with the aim of capitalising on our strengths. We will pay close attention to costs and above all to achieving a return to value generation in the Italian market.”