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Vivendi fights back in €10bn Telecom Italia takeover bid


Vivendi's Vincent Bollore (pictured) will seek to oust Telecom Italia CEO Luigi Gubitosi. Photo: Marlene Awaad/Bloomberg

Vivendi's Vincent Bollore (pictured) will seek to oust Telecom Italia CEO Luigi Gubitosi. Photo: Marlene Awaad/Bloomberg

Vivendi's Vincent Bollore (pictured) will seek to oust Telecom Italia CEO Luigi Gubitosi. Photo: Marlene Awaad/Bloomberg

KKR is setting the stage for a battle of control at Italy’s biggest phone company with a €10.8bn bid pitting the US private-equity fund against France’s Vivendi SE.

Vivendi, the largest shareholder in Telecom Italia SpA, is unlikely to support KKR’s 50.5 euro cent per-share offer, which it views as too low, according to people with knowledge of the situation.

Instead, the company controlled by billionaire Vincent Bollore is going on the offensive by seeking to oust Telecom Italia Chief Executive Officer Luigi Gubitosi at a board meeting this week.

Vivendi suspects KKR may have been invited by Mr Gubitosi, with whom Vivendi has repeatedly clashed, said the people, who asked not to be identified.

The deal, if successful, would rank as one of the biggest transactions in the telecommunications industry this year and would be among the largest purchases ever in the European sector by a private equity firm. KKR is attracted to Telecom Italia’s fixed network, which the former monopoly has gradually upgraded from copper to high-speed fibre.

But Mr Gubitosi’s drive to boost premium services has failed to reverse a precipitous decline in Telecom Italia’s shares, and he has been under mounting pressure from Vivendi to accelerate a turnaround ever since he issued a surprise profit warning last month.

Telecom Italia rose as much as 30pc in Milan on Monday following KKR’s takeover offer.

The company’s bonds fell sharply, with notes due May 2026 dropping 3.3 cents to 103.5 cents, the lowest level since May 2020, according to CBBT prices.

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The Italian company’s internal nomination committee has hired executive search specialist Spencer Stuart Inc to look for possible candidates to replace Mr Gubitosi and other top Telecom Italia managers, with the aim of building a potential succession plan that could please all shareholders including Vivendi, people familiar with the situation said.

KKR’s preliminary cash offer, announced over the weekend, is “non-binding and indicative”, Telecom Italia’s board said in a statement on Sunday after meeting to consider the proposal.

Telecom Italia board members called a new meeting to discuss company strategies this Friday, people familiar with the matter said.

At that meeting, Vivendi could seek to replace Mr Gubitosi, the people said.

Telecom Italia’s Brazil unit CEO Pietro Labriola is seen as a possible internal replacement, as is Chief Revenue Officer Stefano Siragusa, according to the people.

External candidates include Aldo Bisio, who heads Vodafone Group PLC’s Italian unit, they said.

The three men weren’t immediately available for comment. A representative for Vodafone declined to comment.

A spokesman for Vivendi in Paris reiterated that the company is and has always been a long-term shareholder in Telecom Italia and that it will continue working closely with Italian authorities to assure its success. He declined to comment further.