Telecom Italia Shareholders Approve Vivendi Board Members --Update

By Giada Zampano 

MILAN--Shareholders in Telecom Italia Spa approved on Tuesday a request from France's Vivendi SA to obtain four seats on the board of the Italian operator, in a surprise move that would give Telecom Italia's largest shareholder greater influence over the company's strategy.

At Telecom Italia's shareholders meeting, 52.9% of the shareholders voted in favor of the proposal to expand the company's board from 13 to 17 members, while 45.7% voted against, and 1.4% abstained.

The four representatives proposed by Vivendi are Arnaud Roy de Puyfontaine, Vivendi's chief executive; Stephane Roussel, the company's chief operating officer; Herve Philippe, its chief financial officer; and Felicite Herzog.

During a speech to Telecom Italia's shareholders earlier Tuesday, Vivendi Chief Executive Arnaud de Puyfontaine emphasized that the French media company has a long-term, strategic interest in Telecom Italia--one that deserves board representation.

"We are here for a long-term, industrial investment and not for financial reasons," he said.

Vivendi--controlled by French industrialist Vincent Bolloré --has spent more than EUR3 billion to acquire the 20% stake in Telecom Italia.

Telecom Italia has suffered for years from a turnover of major shareholders, a lack of clear strategy and fierce competition in its domestic market.

Earlier Tuesday, Vivendi blocked a share conversion plan sought by Telecom Italia's management, at a divisive shareholders meeting where tensions between the Italian telecoms giant and its largest shareholder spilled out into the open.

As expected, the French company abstained in a vote on a plan to convert Telecom Italia's saving shares into ordinary stock. Under the plan, Vivendi's 20% stake in the Italian telecom operator would have been diluted to about 13%, while Telecom Italia would have received EUR500 million ($549.8 million) in cash.

In recent days, Vivendi had warned that it would abstain, requesting more time to study the conditions of the conversion plan. It argued the cash payment for Telecom Italia's savings shares under the plan was insufficient. Telecom Italia's top management had defended the conversion, stressing that its terms were defined with the help of outside advisers .

On Tuesday, the plan didn't receive the two-thirds of the vote it needed to pass. It was approved by only 62.5% of the shareholders who attended the meeting near Milan, while 36%, including Vivendi, abstained and 1.5% voted against the plan.

Write to Giada Zampano at [e-mail]

(END) Dow Jones Newswires

December 15, 2015 12:26 ET (17:26 GMT)

Copyright (c) 2015 Dow Jones & Company, Inc.