(Bloomberg) -- Vivendi SA demanded that Telecom Italia SpA’s board convene shareholders to appoint new auditors and replace five company directors allied to U.S. activist Elliott Management Corp.
Vivendi is turning up the heat in its battle to win back control of Italy’s dominant phone company from Elliott after the U.S. activist’s allies last month pushed out the company’s CEO, a Vivendi ally.Telecom Italia’s board, dominated by Elliott allies, has resisted Vivendi’s demand for a shareholder meeting to appoint auditors for 2019 onwards. They may see the demand as a pretext for Vivendi to try to win back control of the company.This is the first time Vivendi has called publicly for an extraordinary shareholder meeting and the move could prove a headache for board. Under company bylaws, the board must agree to such a demand barring any “big impediment.”
The boardroom tussle is distracting the company from its efforts to improve profits, lower its debts and revive a share price that is near a record low. Telecom Italia shares are down 24 percent year to date.
Vivendi’s move comes after the Telecom Italia board last week rejected its call for a shareholder meeting. The French media group said it wants Telecom Italia shareholders to revoke the mandates of five board members aligned with Elliott, “particularly those who were involved in these governance issues,” and propose five new onesVivendi, the biggest shareholder in Telecom Italia, has been resisting Elliott’s demand for a full spin-off of the company’s landline network
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