Elliott Has a Rocky Path to Telecom Italia Victory
The government’s rejection of a network spinoff favored by Vivendi doesn’t clear the way for Elliott to prevail with shareholders.
Could be a red herring.
Photographer: Alessia Pierdomenico/BloombergVivendi SA’s plans for Telecom Italia SpA haven’t quite been dealt a sucker punch by Italian regulators. But they — and billionaire Vincent Bollore, who controls the firm — certainly received a blow. The focus should now shift to the carrier’s underlying business, and it needs to do so soon.
The communications regulator said the plan, proposed by then-CEO Amos Genish last year, to separate the landline network legally didn’t go far enough to justify giving the firm an easier ride when it comes to issues like pricing. But as much as Elliott Management Corp., the second biggest investor, jumped on the decision to advocate a further-reaching divestment, the activist still has a lot to do to convince shareholders its plan is sustainable.