(Bloomberg) — Telecom Italia SpA Chief Executive Officer Luigi Gubitosi resigned on Friday, less than a week after private equity firm KKR & Co. made a preliminary 10.8 billion-euro ($12.2 billion) bid for the former Italian phone monopoly.
The company’s directors, meeting Friday evening, accepted the CEO’s offer to step down, according to a statement. Gubitosi remains a member of the board. Bloomberg News was first to report on his imminent departure from the role.
Gubitosi was already under intense pressure following a surprise profit warning last month that led to a rift with Vivendi SE, Telecom Italia’s largest shareholder, people familiar with the situation had said previously.
Chairman Salvatore Rossi will take on oversight of Telecom Italia’s strategic assets, as well as partnerships and alliances, with the company’s head of Brazilian operations, Pietro Labriola, being promoted to the position of group general manager.
Labriola, 54, could take CEO role at a later stage and join the board when Gubitosi or another member leaves, people familiar with the matter said. He has been at the company for about two decades, and he’s a telecommunications veteran. Formerly the head of fixed-line services for enterprises, he worked in 2013 on one of the phone company’s first attempts at spinning off its landline grid.
Telecom Italia is being advised on a succession plan by Spencer Stuart, the company said. The phone carrier also set up a special committee to review the KKR bid and will hire advisers.
Gubitosi’s efforts to boost premium services have failed, while Vivendi has increased the pressure on the beleaguered CEO following repeat profit revisions.
His departure marks the fourth overhaul of top management at Telecom Italia in less than six years. Vivendi has rejected the KKR bid, made on Nov. 21, as too low.
Gubitosi has tried for two years to engineer a merger with Telecom Italia’s smaller, state-backed rival Open Fiber SpA, in an attempt to build a national single network. The plan was opposed by Prime Minister Mario Draghi due to concerns of a return to a telecommunications monopoly.
Gubitosi also faced pressure over a deal with DAZN Group Ltd., the media disruptor known as the “Netflix of sport,” that dented the company’s profit and has failed to generate sales in line with Telecom Italia’s internal targets, people familiar with the matter told Bloomberg earlier this month. DAZN has added fewer-than-expected subscriptions to Serie A, Italy’s top soccer league, via the phone carrier’s TIM Vision set-top boxes, the people said.
The accord between Telecom Italia and London-based DAZN, signed earlier this year, covers distribution and technical support, as well as financing of about 1 billion euros for the U.K. company’s bid to broadcast the next three seasons of Serie A.
(Updates with details from statement in sixth paragraph.)
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