Media

“Vivendi acquired its initial interest in Telecom Italia in 2014. Elliott’s history of agitating at Telecom Italia dates back to 1999, when it rallied shareholders against then CEO Roberto Colaninno, whose plans for the company it opposed. In 2003, Elliott fought a plan for the carrier to merge with its parent company, Olivetti SpA.”

- Bloomberg, “Singer Wins Round Over Telecom Italia as Bollore Aide Quits,” 23 March 2018

 

“Bolloré’s decision [regarding Ubisoft] was a reassuring show of restraint for a company better known for misguided investments. The group last year paid 3.9 billion euros for Havas, run by Bolloré’s son Yannick, shortly before a downturn forced the ad group to scrap its growth targets. And shares in Telecom Italia have lost a third of their value since Vivendi said in June 2015 that it was the largest investor in the company. Activist investor Elliott is calling for Vivendi-appointed board members to step down.”

- Liam Proud, Reuters BREAKINGVIEWS, 21 March 2018

 

“The U.S. fund yesterday issued a letter to TIM shareholders expressing its opinion on the strategic and operational shortcomings that led the share price - in the two years of Vivendi's controlled management - to lose the 35% of its value. Elliott proposes an alternative plan that should be managed by an Italian board, whose components are now known. The letter, it has to be said, is convincing. And it won't be easy for Vivendi to parry the shot.”

- Antonio Spampinato, Libero, 17 March 2018 (Translated from Italian)

 

General Bolloré's Italian campaign turns into a fiasco: Two and a half years after his entry into the capital of the historic operator Telecom Italia, General Bolloré is looking for an exit strategy. His group Vivendi took power in 2015 and placed its men, in 2017, both on the board of directors and the general management board of the Italian company. But the results are not up to the task, he got angry with the Italian establishment, and now a famous American activist fund, Elliott, has come into the capital of TIM to ask for the replacement of directors newly appointed by Vivendi."

- Philippe Escande, Le Monde, 15 March 2018 (Translated from French)

 

Under Vivendi, which owns 24 percent, the shares have languished amid clashes with local government and regulators, governance blunders and strategic U-turns. The solution, Elliott says, is to install truly independent directors and list or sell the company’s fixed-line grid. The proposal, which goes much further than Chief Executive Amos Genish’s plan to put TIM’s network in a separate but wholly owned subsidiary, has some merits. A stand-alone business would stand a better chance of being valued like other infrastructure assets, which tend to attract higher valuations. If investors were to rate TIM’s network in the same way they value, say, gas transport group Snam or electricity-grid operator Terna, the backbone could be worth at least 10 times its estimated 2 billion euros of EBITDA. It could also support up to 11 billion euros of debt – nearly half its parent’s net borrowing – without irking rating agencies."

- Lisa Jucca, Reuters BREAKINGVIEWS, 16 March 2018

 

“Many shareholders also oppose Vivendi. At last year’s annual meeting, the French group’s plans to appoint 10 of TIM’s 15 board members passed with a razor-thin majority. A series of governance blunders that knocked the company’s shares have further tried investors’ patience.

- Lisa Jucca, Reuters BREAKINGVIEWS, 15 March 2018

 

“TIM may be a rare case where the national interest and shareholder value go hand in hand.

- Lisa Jucca, Reuters BREAKINGVIEWS, 15 March 2018

 

“Adesso per Vivendi la strada diventa davvero ripida. […] tenendo conto che in tre anni di gestione francese di valore non solo non è stato creato ma, se guardiamo al grafico di Borsa, ne è stato bruciato. E neanche poco”.

“Now for Vivendi the road becomes very steep. […] keeping in consideration that in three years of French management, not only was value no longer created, but if we look at the stock price, it was burned down. And not slightly”.

- Federico De Rosa, Corriere della Sera, 12 March 2018

 

“A differenza di Vivendi, Elliott non sembrerebbe avere particolari mire geopolitiche, ma sarebbe più spinto nella direzione dell’ottimizzazione degli asset”.

“Unlike Vivendi, Elliott would not seem to have particular geopolitical aims, but would be more driven in the direction of asset optimization.

- Claudio Antonelli, La Verità, 11 March 2018

 

“[Elliott] is building a stake in Telecom Italia Spa -- a fiendishly complicated tangle of vested interests that includes billionaires, politicians and unions. The move would put Paul Singer's outfit on the opposite side of the table to fellow tycoon Vincent Bollore, the smart and connected Frenchman whose Vivendi SA controls the Italian operator. Not the easiest bargaining partner. Still, it might offer hope to Telecom Italia's poor shareholders . . .

- Lionel Laurent, Bloomberg Gadfly, 6 March 2018

 

Investors could certainly use a counterweight to media group Vivendi, which controls 10 out of 15 board seats even though it owns just 24 percent of Telecom Italia. This stranglehold has caused unease in Rome, leading the Italian operator down some unhelpful paths.”

- Lionel Laurent, Bloomberg Gadfly, 6 March 2018

 

Anything that lessens Vivendi's absolute control might make the company less vulnerable to political interference, according to Bloomberg Intelligence's Erhan Gurses.”

- Lionel Laurent, Bloomberg Gadfly, 6 March 2018

 


“All shareholders would love this Milanese to be priced like a classy Super Tuscan. That will not happen soon. But assuming Elliott can win over investors, and the regulator, there is some hope for that.”

- Financial Times, Lex, “Telecom Italia/Elliott: Grapes of wrath,” 7 March 2018

 

“Vivendi has been an “awful” investor in Telecom Italia, Italy’s outgoing Industry Minister Carlo Calenda told la Repubblica daily”

- Francesca LandiniReuters, 16 April 2018

 


Research

“This represents a step-victory for Elliott. . . It does make an independent board more likely, although this will come down to Vivendi’s next move and shareholder attendance/voting at the next shareholder meeting.”

- Bernstein analyst, as quoted in Bloomberg, “Singer Wins Round Over Telecom Italia as Bollore Aide Quits,” 23 March 2018

 

We welcome Elliott’s intention to challenge Vivendi’s direction and coordination over TI as we agree that Vivendi’s conflict of interest implied governance issues and capped TI’s share price performance. Regarding Elliott’s proposals, we positively  view  the  network  project  in terms  of regulatory,  competition  and  valuation implications  (with ‘some provisions’  as  to  the  service company).  We  also  welcome  the  project  of  conversion  for the  savings  shares which, however, remains  subject  to  the  favourable  vote  of  two-thirds  of  the shares  present  at  an  EGM,  and therefore could be potentially blocked by Vivendi (again).”

- Banca IMI, “Elliott’s Showdown,” 19 March 2018

 

Since Day One, we have been in agreement with Elliott’s proposed measures (access network separation with the merger of Open Fibre, the disposal of noncore assets, the conversion of the saving shares), but we saw Amos Genish as the right CEO to deliver both these measures and the announced plan. All these measures can re-rate the stock strongly if done at the right time and conditions – they cannot be rushed.”

- Deutsche Bank, “Public company governance? Investors can choose,” 15 March 2018

 

“TI is trading at its widest discount to the sector for years, reflecting market concerns on Enel overbuild in fixed, new entrant Iliad in mobile and expectations of consensus misses. It is the only stock in the sector to trade on <10x 2019E EV/EBITDA - capex.

-  Goldman Sachs, “Material upside at the end of the downgrade cycle. Up to Buy,” 8 March 2018

 

“Dhananjay Mirchandani, an analyst with Bernstein, said that a reduction of Vivendi’s presence on the board would be viewed “favourably by the Italian government.”

- Financial Times, “Elliott seeks to oust Telecom Italia’s Vivendi-linked directors,” 15 March 2018

 

“TI’s leverage, historically high returns and unsustainable market dominance have been the main problems facing TI over the years. The weak Italian economy has also played an important role over time. But the biggest underlying driver has been the absence of consistent long-term vision as TI often relied (or at least its investment thesis did) on silver bullets (OPAC sale under Bernabe, Comisario Mercantil; mobile market consolidation; infrastructure consolidation).”

- Citi, “Be Careful What You Wish For,” 13 March 2018

 

“Elliott's advent in the shareholder base has some positive implications and should limit any conflicts of interest from damaging TI minorities if successful, by challenging the controlling shareholder Vivendi”.

- Citi, “Be Careful What You Wish For,” 13 March 2018

 

“Activism does not surprise us given the value upside in TI and historical over leverage / under investment. . . . Reports of activist Elliott's investment in TI comes as no real surprise to us, we wrote about potential shareholder activism in Euro telco in our 2018 outlook (European Telecoms: Outlook 2018: increasingly de-risked & relatively cheap 12 December 2017). In TI's case there is significant value to unlock in our view based on our valuation analysis.

- BofAML, “Activism Unsurprising,” 6 March 2018

 

“…we also see the government more aligned with Elliott's proposals for: 1) a more independent board, and 2) a potentially listed fixed network per the comments from Minister Calenda.”

- BofAML, “Italian State seeks a ‘seat at the table”, 5 April 2018

 

Stakeholders

“Italian Industry Minister Carlo Calenda said on Wednesday a plan for Telecom Italia presented by activist investor Elliott was in line with the government's strategy to protect the network as an asset of national importance. ‘The plan looks consistent with what we want to do in order to defend public interests,’ Calenda said.”

- Reuters, “Elliott’s plan for Telecom Italia in line with government’s strategy,” 21 March 2018

 

“‘When [Elliott goes] in, you know there's value to be extracted,’ said Banca Ifigest fund manager Roberto Lottici who bought TIM shares on the news.”

- Reuters, “Telecom Italia promises higher returns as Elliott emerges,” 7 March 2018

 

“Funds sub-advised by SVM have purchased over 1 percent of TIM’s ordinary shares with the intention to pro-actively support Elliott,” SVM said in a statement…“The investment in TIM is underpinned by the belief that there is a significant discrepancy between the current market price of Telecom Italia’s shares and the intrinsic value of the company’s underlying assets,” SVM said in its statement. “SVM attributes this discrepancy to what can only be described as the ‘Vivendi Discount’,” it added.

- Crispian Balmer, Reuters, 14 April 2018

Disclaimer

This website and the information contained within it (together referred to as "this website") is an information resource for shareholders in Telecom Italia SPA ("Shareholders"). Through this website Shareholders can access copies of the correspondence between Elliott Advisors (UK) Limited ("Elliott"), Elliott International LP, Liverpool Limited Partnership, Elliott Associates LP (“Elliott Funds”) and the management of Telecom Italia SPA (“TI”), the press releases issued by Elliott, and presentations relating to TI prepared by Elliott.

This website is not intended to be and is not an investment recommendation as defined by Regulation (EU) No 596/2014. No information on this website should be construed as recommending or suggesting an investment strategy or as representing any opinion as to the present or future value of any financial instrument.  The information on this website is not an offer to sell or a solicitation of an offer to buy any security, nor shall Elliott offer, sell or buy any security to or from any person through this site.  The information in this website is not intended to constitute nor should it be construed as advice of any kind, whether in relation to legal, compliance, accounting, regulatory matters or otherwise.  Elliott is expressing its opinions solely in its capacity as an investment advisor to the Elliott Funds.  Nothing in this material should be taken as any indication of Elliott’s or the Elliott Funds’ current or future trading or voting intentions in relation to TI or any other listed security.  As of 16th March 2018, Elliott Funds hold a position in the issued share capital of TI.  As a result of its arrangements with the Elliott Funds, Elliott has a financial interest in the profitability of the Elliott Funds' positions in TI.

Materials contained in this website do not relate to a board-control seeking resolution in TI. Elliott is not seeking to secure commitments or proxies from TI shareholders to vote their shares to support the resolutions that Elliott has requested to table at TI general meeting convened on April 24, 2018 other than within the context of any proxy solicitation that Elliott may elect to pursue in accordance with applicable law.

This website is published and maintained by Elliott which is authorised and regulated by the Financial Conduct Authority in the United Kingdom.   Elliott and its affiliates, officers and employees make no representations or warranties, express or implied, regarding the accuracy, reliability, completeness, suitability or other characteristics of the information and materials (which may include information and materials obtained from third party sources) contained on or presented through the site. The information on this website is provided “as is”, is subject to change at any time, and Elliott has no duty to provide notice of such changes, nor is it obliged to undertake such changes.  Neither Elliott, nor any of its affiliates or officers shall be liable for any direct, indirect, consequential, punitive or special losses or damages of any kind whatsoever arising from reliance on any of the content of this website.

Telecom Italia SPA has not approved nor does it have any responsibility for this website or its contents.  This website was last updated on 5th April 2018.  Elliott does not intend to update this website on a regular basis, but may from time to time add additional information as it becomes available.