Gubitosi could be gone as board regroups to oppose takeover plan
Luigi Gubitosi the former CEO of Telecom Italia (TIM) could be ousted in a coup engineered by top investor Vivendi in a boardroom battle tomorrow. Vivendi wants to appoint a new CEO and to rally support for alternative plans to a takeover.
Reuters has reported that Vivendi is pushing for a board reshuffle at the Italian phone group as stakeholders plan their response to a €10 billion bid to gain control of TIM from US private equity fund KKR.
Investor criticism
In the face of investor criticism of his performance, led by Vivendi, and disappointing company results Gubitosi resigned as TIM chief executive in November. However he remained as a board director, which prevented his designated successor Pietro Labriola from becoming CEO since he needed to become a board member and there are no vacancies on the board.
Labriola, the head of TIM’s Brazilian unit, has been promoted to general manager while they await a board seat becoming available. If Gubitosi does not vacate his seat, by resigning as a director on Friday, Vivendi is considering pushing for the board revamp, according to Reuters’ sources.
If so Vivendi will request an extraordinary shareholder meeting to be called in order to appoint a new board. This would need the board’s backing to go through. TIM has declined to comment
Vivendi wants Gubitosi gone
A board revamp could also be triggered by the resignation of a majority of directors.
Even if another board member stepped down and offered their seat to Labriola, Gubitosi’s fate seems sealed as Vivendi reportedly wants Gubitosi gone, Reuters’ sources said.
Vivendi needs a board reshuffle anyway because it wants to map out an alternative plan to KKR’s to relaunch the group.
Shares values halved
The KKR proposal exposes Vivendi to a capital loss on its 24 per cent TIM stake. The French media group spent double the money that KKR is offering them, 0.505 euros per share, on building its stake.
Vivendi is aiming to bolster its position of 24 per cent stake in TIM and two out of 15 board seats by getting the support of Italian state investor CDP for its board revamp plans, the sources said.
CDP, TIM’s second-largest shareholder, has declined to comment.
Meanwhile TIM’s tech is performing
There is good transformation news to report, as TIM’s network set new performance records. This week TIM set a new European 5G record by successfully creating the first consistent 5Gbps+ downlink connection on a 5G live network in Europe.
The record was achieved in collaboration with Ericsson and Qualcomm Technologies on the live network in Rome, combining 5G 3.7 GHz and millimetre wave frequencies in a complete 5G Stand Alone system. The device used features Snapdragon X65 5G Modem-RF System.
This ultra-broadband connection was obtained through Dual Connectivity between 3.7 GHz and millimetre waves frequencies (26 GHz), using 800 MHz bandwidth in the 26 GHz frequency. This live network wireless access solution has been effectively integrated into the complete 5G Stand Alone (SA) with a brand new 5G Core network.
This result represents another significant technology milestone for TIM after previously setting a record of 4 Gigabits per second on 5G mmWave.
“With this new European record, we confirm our position as the reference operator in the evolution of networks and services for the Gigabit Society,” said Stefano Siragusa, chief network, operations and wholesale officer at TIM.