Telecom Italia Denies Report Board to Seek CEO Genish's Ouster
(Bloomberg) -- Telecom Italia SpA denied a newspaper report that an extraordinary meeting would be called this week to seek the resignation of Chief Executive Officer Amos Genish, a company spokesman said.
Rome newspaper Il Messaggero had reported earlier Sunday that directors backed by both Vivendi SA, the carrier’s biggest shareholder, and U.S. activist investor Elliott Management Corp., which owns the second-largest stake, had agreed to call an extraordinary board meeting to obtain Genish’s resignation. Telecom Italia Chairman Fulvio Conti is considering Rocco Sabelli and Alfredo Altavilla as possible successors, Messaggero reported.
The Telecom Italia spokesman said that a board meeting has already been called for Dec. 6 and that no extraordinary session is scheduled before then. At the same time, a spokesman for Vivendi reiterated its full support for Genish, saying that it would back him against any move to dismiss him.
Italy’s populist government plans a regulatory framework to help set up a single telecommunications infrastructure that would allow a merger of the networks of Telecom Italia and state-backed Open Fiber SpA, newspaper Il Sole 24 Ore reported separately. The measure would seek to avoid a breakup of Telecom Italia, and maintain a strategic asset -- the landline grid -- in Italian hands.
Genish, who is trying to revive the former monopoly under pressure from Elliott, suffered a double dose of bad news on Friday when the company scrapped a debt-reduction target and took a 2 billion-euro ($2.3 billion) asset writedown. New competitors are emerging to threaten its domestic business and it considers an acquisition in Brazil.
Telecom Italia hasn’t paid a dividend on its ordinary shares since 2013 and faces demands on its cash from network investments, spectrum costs, debt servicing and pension liabilities. Its Italian fixed-line division is under assault from Open Fiber, and the mobile unit faces competition from the entry of discount carrier Iliad SA.
France’s Vivendi brought in Genish in September last year, only to lose control of the board to Elliott and its allies in May. The 57-year-old Israeli former army captain has walked a tightrope ever since and has faced continued press speculation over his future.
People familiar with the matter told Bloomberg in September that board directors representing Elliott had grown more impatient over his handling of the company.
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