French conglomerate Vivendi withdrew its bid to replace five TIM board members at the 11th hour but doesn’t seem happy about it.
TIM shareholders were due to vote on Vivendi’s request to replace those board members it had identified as acting in bad faith last Friday. But at the meeting itself TIM CEO Luigi Gubitosi apparently had one last attempt to get Vivendi to back down and, amazingly, it did. Presumably it had realised it wasn’t going to win the vote and not to have it rather than suffer a humiliating defeat.
Here’s what Caroline Le Masne de Chermont, Vivendi Group Head of Legal Affairs (why do Vivendi execs all sound like aristocrats?), had to say at the meeting:
“As extensively expressed in our request, we asked the shareholders to vote for a change of governance, because what happened in and around the Board since last May has affected the stock price, and the whole functioning of the company.
“However, there is no point in revisiting here and now the events of the last year, particularly those that cannot be changed. Let’s focus instead on the changes we would like to see in the near future. Vivendi wishes TIM’s board to be more reflective of the company’s shareholder base and to be led in an independent, transparent and fully inclusive manner.
“To conclude, we are prepared to give credit to the CEO. Accordingly, following his suggestion, Vivendi has decided not to pursue today its proposal to revoke and replace five Board members, provided that this has the support of the shareholders’ meeting.
“What needs to occur next, may at this stage be left in the hands of the Board members and their individual conscience. What we can say is that if change does occur as the CEO announced, he can count on our loyal and stable support as the company’s largest shareholder.”
Essentially Vivendi seems to be conceding defeat, for now, in its battle to control the TIM board, but reserves the right to kick off again if the current board doesn’t start raising its game sharpish. Vivendi has presumably realised its open hostility to the TIM board isn’t a great look and its sudden conciliatory stance about letting bygones be bygones is just hilarious.
In response Elliott issued the following statement: “Elliott welcomes Vivendi’s decision to withdraw its request to shareholders to revoke five of TIM’s Directors, a clear sign that Vivendi understands that there is broad support for TIMs existing independent Board.
“This outcome is a victory for the company and paves the way for stability and sustained value creation for all of TIM’s stakeholders. Elliott remains fully supportive of CEO Luigi Gubitosi, the Company’s management team and the existing independent Board, and looks forward to constructive dialogue with all stakeholders to pursue a value maximising path forward for the company.”
Gubitosi himself apparently struck a cautiously conciliatory tone, calling the move courageous and a first step towards peace. TIM shareholders will presumably be happy that this period of corporate turmoil has been concluded, although shares were only up a few percent on Friday. Maybe this muted optimism was a consequence of the veiled threats contained within Vivendi’s climb-down. It may have exhausted this strategy but this is unlikely to be the last time Vivendi clashes with Elliot over TIM.