Telecom Italia CEO says board situation problematic, committed to job: paper

MILAN (Reuters) – Telecom Italia (TIM) (TLIT.MI) CEO Amos Genish said tensions between the company’s management, its board and shareholders were counterproductive, but said he was committed to staying, according to an excerpt of an interview with La Repubblica.

Telecom Italia CEO Amos Genish gestures during a debate at the RAI state television headquarters in Rome, Italy November 10, 2017. REUTERS/Remo Casilli

TIM’s top shareholder Vivendi (VIV.PA) has been at loggerheads with Elliott since the activist fund took a stake in Italy’s biggest phone group this year and ended up wrestling board control away from the French media group in May.

The battle of words has intensified in recent months as TIM fell under pressure due to tougher competition at home, which prompted speculation that Genish’s position could be at risk.

Shares in TIM are down about 30 percent so far in 2018, worse than a 15 percent fall in the European telecoms index .SXKP.

In an excerpt of an interview to be published in full on Monday, Genish pledged to push ahead with a strategy focused on a transition toward fifth-generation mobile services.

But he said there was a “problematic situation” within TIM that was “creating a lot of trouble and is becoming unsustainable”.

Vivendi reaffirmed its support this week for Genish and accused Elliott of running a “rumor campaign” to discredit him.

The attack follows a similar move last month when Vivendi said TIM’s performance had been “disastrous” since Elliott seized control of the Italian firm’s board.

Elliott has said Vivendi had “fallen prey to the ‘short-termism’ it has previously decried”, casting judgment on the new board just four months after it was appointed. It also urged Vivendi to work on constructive solutions at board level.

Genish told La Repubblica “greater alignment between shareholders, management and the board were needed” to support the company’s growth.

Under Genish, who was appointed when Vivendi controlled the board, TIM is working on a three-year turnaround plan focusing on a digital transformation and fixing the group’s finances.

The former state phone monopoly has been facing growing challenges in fixed-line and mobile businesses as broadband group Open Fiber rolls out a rival fiber optic network and after French telecoms group Iliad (ILD.PA) entered Italy in May with a low-price mobile offer.

Separately, a source familiar with the matter told Reuters TIM had mandated Enrico Laghi, a business professor in Rome and one of three administrators looking after struggling airline Alitalia, to review the valuation of the phone group’s assets.

Such review could result in a writedown of some of TIM’s infrastructure, including its copper and fiber networks, that could weigh on its profits, La Repubblica said on Saturday.

Reporting by Agnieszka Flak; Editing by Edmund Blair

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Vivendi reaffirms support for TIM CEO, decries ‘rumor campaign’

PARIS/MILAN (Reuters) – Top shareholder Vivendi (VIV.PA) reaffirmed its support for Telecom Italia’s (TIM) (TLIT.MI) Chief Executive Amos Genish, while accusing activist fund Elliott of running a “rumor campaign” to discredit him.

Telecom Italia CEO Amos Genish gestures during a debate at the RAI state television headquarters in Rome, Italy November 10, 2017. REUTERS/Remo Casilli

The French media group, which owns 24 percent of TIM, has been at loggerheads with Elliott since the U.S. hedge fund took a stake in Italy’s biggest phone group earlier this year and ended up wrestling board control away from Vivendi in May.

The battle of words has intensified in recent months as TIM fell under pressure due to tougher competition at home, which in turn prompted speculation that Genish’s position at the company could be at risk.

Shares in TIM are down around 30 percent so far in 2018, worse than a 15 percent fall in the European telecoms index .SXKP.

“Vivendi supports TIM’s CEO Amos Genish unreservedly and values his contribution,” Vivendi said on Saturday, confirming comments also reported by Italian media on Saturday.

“We believe that this vicious rumor campaign is orchestrated by Elliott, whose lack of organization is bringing down Telecom Italia,” added Vivendi.

The attack follows a similar move last month when Vivendi said TIM’s performance had been “disastrous” since Elliott seized control of the Italian firm’s board.

When contacted by Reuters on Saturday, Elliott referred to the statement it had released in response to Vivendi’s previous accusations in September.

At the time, Elliott said Vivendi had “fallen prey to the ‘short-termism’ it has previously decried”, casting judgment on the new board just four months after it was appointed.

It also told the French group that TIM was executing a plan that was “devised and approved by Vivendi” and urged the French group to work toward constructive solutions at the board level.

Under Genish, who was appointed when Vivendi controlled the board, TIM is working on a three-year turnaround plan focusing on a digital transformation and fixing the group’s finances.

However, the former state phone monopoly has been facing growing challenges in both fixed and mobile: Broadband group Open Fiber is rolling out a rival fiber optic network while French telecoms group Iliad (ILD.PA) in May launched its low-price mobile offer for Italy.

TIM also committed this week to spending more than 2.4 billion euros ($2.77 billion) – much more than initially expected – on fifth-generation mobile spectrum in Italy, in a move that is likely to raise its debt pile and could affect its ambition to return to an investment grade credit rating next year.

Reporting by Agnieszka Flak and Sudip Kar-Gupta, Editing by William Maclean

Our Standards:The Thomson Reuters Trust Principles.