MILAN: Telecom Italia’s top investor Vivendi sees the current CEO of the former phone monopoly as a short-term solution given the company’s problems, two sources close the French media giant said on Friday.
TIM Chief Executive Luigi Gubitosi survived a boardroom showdown on Thursday at a meeting sought by Vivendi following two profit warnings in three months, but the French media giant is still calling his role into question.
The board meeting has shown that Vivendi’s concerns are well-founded and that management does not have a clear vision of how to respond to these concerns, one of the sources said.
TIM was not immediately available to comment.
Vivendi holds 24% of TIM, an investment exposing it to a potential 1.8 billion euro ($2.06 billion) capital loss at current market prices.
Having failed to stem a steady revenue decline in TIM’s crowded domestic market, Gubitosi outlined to the board plans to address TIM’s challenges, including ways to extract value from its key network assets.
But his proposals, aimed at bringing investors into TIM’s assets under a spin-off plan, failed to get Vivendi’s backing.
TIM’s network assets are deemed strategic by the government, and Treasury-owned CDP has built a 9.8% stake in the group to oversee them and help counter Vivendi’s influence.
Both the French group and CDP in March backed Gubitosi’s reappointment and CDP has resisted Vivendi’s efforts to question his position, sources have told Reuters.
($1 = 0.8737 euros)
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