Telecom Italia CEO resigns after bust-up with Vivendi chairman
Marco Patuano, CEO, Telecom Italia © Flickr/cc-licence/Kate Riddle
- CEO Marco Patuano announces his resignation
- Disagreements with Vivendi chairman, Vincent Bollore
- Vivendi now owns almost 25 per cent of TIM
- Hunt now on for new CEO
[Updated Monday 15:40 to reflect breaking news]
Earlier this year, Telecom Italia unveiled its new slick brand identity, dropping its country name and focusing on the acronym “TIM”; in the next few days it could be unveiling a new CEO. The Italian telco has confirmed this morning that there’s trouble afoot, releasing a short statement on the speculation that CEO Marco Patuano is about to resign.
“Upon Consob’s (Italy’s stock exchange commission) request, Telecom Italia announces that negotiations are ongoing with the Chief Executive Officer aimed at the definition of an agreement – to be submitted to the relevant corporate bodies – on the consensual suspension of the offices held by the CEO within the Group,” the statement said. “At present no communication about resignation or surrender of the office has been presented.”
Yet a few hours later, Patuano did indeed resign. According to a second (equally short) company release: "Chief Executive Officer Marco Patuano today handed in his resignation, which will become effective subject to the relevant corporate bodies’ approval of the pertaining terms and conditions. As of today’s date, he owns 70,000 ordinary shares and 30,000 savings shares in Telecom Italia S.p.A."
If press reports are to believed (and they are appearing in all the respected financial papers), then the problem appears to have been caused by a “clash” between Patuano and Vincent Bollore, chairman of Vivendi – the telco’s largest investor.
Bollore has made no secret of the fact that he favours a sale of Telcom Italia’s Brazilian subsidiary, TIM Participacoes – the country’s second largest mobile operator, in order to concentrate the business on the home market of Italy, where the telco generates about 70 per cent of its revenues. He’s also been steadily increasing Vivendi’s investment in Telecom Italia, from 8 per cent in June last year to just under 25 per cent today.
TIM chairman Giuseppe Recchi will apparently assume Patuano’s role as interim CEO until a permanent replacement is appointed, with an outsider being the favoured option – so long as he agrees to toe the Bollore line, of course. Other reports suggest that Arnaud De Puyfontaine, CEO of Vivendi, has already met with potential candidates, before Patuano has even agreed to resign.
Reports suggest that Patuano may receive a €7 million pay-out when he leaves. His departure – after what has apparently been a seven-month power tussle – leaves the way clear for the Bollore camp to progress with the sale of TIM Participacoes and focus proceeds on the domestic Italian market, creating more of a media group for southern Europe.
Last month, Telecom Italia ended discussions over a proposal to merge its Brazilian company with local rival Oi (a prolonged and complex affair, that also dragged Telefonica into the picture), making a sale now more likely. Another factor in this Machiavellian plot is the rumour that Vivendi is close to agreeing terms to buy the the pay-TV business of Italy’s Mediaset – suddenly a southern Europe media strategy looks a distinct possibility. Telecom Italia reported a €72m net loss for 2015.