Vivendi chief defends Telecom Italia plan

Arnaud de Puyfontaine

Vivendi’s CEO has said the group has no plans to “exercise a relevant influence” on Telecom Italia or integrate the two groups and has defended its plan to place four new members on the Telecom Italia board as something that would benefit the Italian telco.

Vivendi CEO Arnaud du Puyfontaine was responding to a letter sent to him directly from Assogestioni, a group representing Telecom Italia institutional investors, that raised concerns about Vivendi’s plans. Assogestioni said that the increase in the size of the board proposed by the French media group would dilute the representation of minority shareholders and accusing Vivendi of being unclear in its intentions.

The group asked Vivendi to “explain the concrete purposes underlying your request” and expressed concern that “in the recent past Telecom Italia has already suffered from over-representation of relevant shareholders…to the detriment of institutional investors”.

In his reply, Du Puyfontaine said he was “surprised” that “the debate and concerns are mainly focused on preserving the proportion between groups of directors based on the original designated shareholders, instead of debating the merit of the proposals”.

He said that Vivendi had invested over €3 billion in its position in Telecom Italia with “a long-term view and approach, sharing Telecom Italia’s current strategic plan and objectives” and argued that the plan to increase the size of the Telecom Italia board from 13 to 17 via the appointment of four additional members named by Vivendi would “enrich” the board “as all proposed candidates have multidisciplinary academic and strong international management experience with significant roles within multinational groups”.

Du Puyfontaine affirmed that “Vivendi has no plan to exercise a relevant influence on the Company nor to integrate the two Groups, but rather to add value to the already high quality and standing of the current Board and management”.

“The fact that the three proposed [Vivendi] candidates are top figures within the Vivendi Group only confirms the utmost attention given by Vivendi to the future of Telecom Italia,” he said.

Du Puyfontaine also rejected that there was any conflict of interest surrounding the position of Tarak Ben Ammar, an independent member of the Vivendi Supervisory Board who sits on the Telecom Italia board, saying that he had “no management or executive position within the Vivendi Group” and said that Vivendi’s request that its nominees be released from non-competition obligations under Italian law were justified by the fact that “the two Groups are active in different businesses, with different clients that are certainly not competitors among themselves” and was simply aimed at putting all Telecom Italia directors in the same position.