(Bloomberg) -- A prominent shareholder advisory firm has once again thrown its support behind Elliott Management Corp.’s efforts to revamp the board of Telecom Italia.
Telecom Italia shareholders should vote for Elliott’s expanded slate of 10 nominees if a vote scheduled for May goes ahead, even though it would grant the New York-based hedge fund control of the board, ISS said in a statement Monday. The advisory firm said Telecom Italia’s decision to challenge its own auditors’ decision in court “raises questions regarding the independence of the board.”
Since ISS first supported Elliott last week, Telecom Italia has filed a lawsuit to remove Elliott’s proposal to elect replace six directors at the April annual meeting. Contrary to the recommendations of its own auditors, it instead wants to hold a special shareholder meeting on May 4 where investors would be asked to vote on an expanded slate of nominees, one presented by majority shareholder Vivendi SA and the other by Elliott.
“The fact that this oversight body -- as well as the five independent directors representing institutional investors -- supported the inclusion of Elliott’s proposals on the agenda should have given pause for thought,” ISS said in its report Monday.
ISS said shareholders should vote for Elliott’s slate because Vivendi has yet to publicly disclose any rationale for its own nominees and has a deteriorating relationship with Italian regulators. It said it also favored Elliott because it was proposing a fully independent slate.
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