Vivendi Pushes for Representation on Telecom Italia Board

MILAN—French media company Vivendi SA pressed its case for representation on the board of Telecom Italia SpA on Tuesday, at the start of a divisive shareholders' meeting that will lay bare the tensions between the Italian telecoms giant and its largest shareholder.

During a speech to Telecom Italia's shareholders, Vivendi Chief Executive Arnaud de Puyfontaine emphasized that the French group 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 €3 billion ($3.29 billion) to acquire a 20% stake in Telecom Italia, making it the Italian company's largest shareholder. It isn't represented on the board but is eager to join to give the telecom firm what it considers to be better direction.

Mr. de Puyfontaine confirmed his firm's request to increase the Telecom Italia board to 17 members from 13 and to name four directors representing Vivendi. However, opposition from a number of Telecom Italia's other investors means the plan is likely to be rejected by shareholders at a vote later Tuesday.

Mr. de Puyfontaine also reiterated Vivendi's plans to abstain on Tuesday on a Telecom Italia share conversion proposal—the abstention is likely to defeat that proposal as well.

Under the plan, all shareholders would be diluted by about 30%, while Telecom Italia would receive €500 million in cash. Vivendi would see its stake go from the current 20% to about 13%, should the plan pass. It has said it believes the cash payment for savings shareholders under the plan is insufficient.

At the shareholder meeting, Telecom Italia's top management defended the conversion plan, stressing that its terms were defined with the help of outside advisers.

The conflict between shareholders and Telecom Italia's management could leave the company paralyzed. The telecom firm has suffered for years from a turnover of major shareholders, a lack of clear strategy and fierce competition in its domestic market.

Write to Giada Zampano at [e-mail]

(END) Dow Jones Newswires

December 15, 2015 09:45 ET (14:45 GMT)

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