Italian incumbent sees eight directors resign, including Recchi and de Puyfontaine, as pressure from Elliott mounts

No fewer than eight members of TIM’s board of directors resigned this week as a direct result of the pressure exerted on the Italian telco by activist investor Paul Singer.

Following a board meeting on Thursday, TIM announced the departure of deputy chairman Giuseppe Recchi, effective immediately, and said chairman – and CEO of major shareholder Vivendi – Arnaud de Puyfontaine, plus six other directors, would step down at its shareholder meeting on 24 April.

Former Telecom Italia chief executive Franco Bernabe has been appointed as deputy chairman.

The directors met to consider proposals from shareholders Elliott International, Elliott Associates, and The Liverpool Limited Partnership, all funds affiliated with Singer’s Elliott Management Corp, regarding the agenda of the upcoming shareholder meeting. Specifically, Elliott had called for the replacement of many of the departing directors to be discussed at the meeting. TIM said the agenda has not been amended, since the point is now moot.

Singer’s various funds have increased their holding in TIM to 5.74%, according to a Consob filing on Wednesday.

Elliott is pushing for the spin-off of TIM’s network into a separate company and a subsequent listing.

On Thursday Reuters reported that TIM will submit its final proposal on the network separation to the regulator in the coming days. The process is likely to take 12-18 months and the telco would retain control of the resulting entity, the newswire said.

It explained that TIM CEO Amos Genish has not ruled out the idea of selling a stake in the network company but would want TIM to retain control of it. Its sources said the unit would have to be a fully regulated business before TIM would consider a listing.

Reuters added that Elliott is in favour of the idea of single national network in Italy, which could indicate some sort of tie-up with Open Fiber, the fibre broadband network that is being rolled out alongside Enel’s energy network and is jointly owned by the utility company and state-owned lender CDP.

An unnamed source said TIM could be open to acquiring Open Fiber, but not at any price.