By Elvira Pollina and Emilio Parodi
MILAN (Reuters) – An Italian court said on Tuesday it had rejected a request by Telecom Italia’s top investor Vivendi to annul the former phone monopoly’s decision to sell its landline grid to a consortium led by KKR.
France’s Vivendi, which holds 24% of TIM, turned to a Milan court in December 2023 to challenge the decision by TIM’s board to approve the deal, which was worth up to 22 billion euros ($22.4 billion) and was finalised in July.
The court said in a statement that Vivendi did not have grounds to pursue legal action.
Vivendi said it intended to appeal the decision, saying the court had not addressed the merits of the case. It said it continues to believe that the sale of the network should have been subject to a shareholder vote.
In the ruling, reviewed by Reuters, the court said that Vivendi had failed to use its right to call a shareholder meeting.
It added that Vivendi representatives, while complaining that TIM did not call a shareholder vote over the sale, had never told the court during the proceedings that they would have voted against it.
A spokesperson for TIM, which was advised by lawyers at GPBL, declined to comment.
Vivendi has said an extraordinary shareholder vote was needed because the deal had de facto changed the nature of TIM’s business and any dissenting shareholders should have had the right to withdraw, by selling their shares back to the company.
The sale of TIM’s most valuable asset helped the former phone monopoly to cut its debt pile and stabilise its finances. As part of the deal, Giorgia Meloni’s conservative government took 16% of the network.
EXIT?
After a round of fruitless talks with Rome over TIM’s future, Vivendi took a back seat as an investor and in January 2023 withdrew its representative on the board.
The Paris-listed group has signalled it is open to selling its stake in TIM, which has a value of about 950 million euros at current market prices, as it no longer considers it strategic.
The file has drawn interest from private equity firms, including CVC, according to people familiar with the matter.
However, any transaction needs support from the Italian government, which has the power to vet any sale of more than 3% of TIM.
Italian state lender CDP is the second-largest investor in TIM, with a 10% stake.
(Reporting by Elvira Pollina and Emilio Parodi; Editing by Keith Weir, Gavin Jones, Jan Harvey and David Goodman)
