VIVHY Vivendi SE (PK)

   By Marc Navarro Gonzalez and Alberto Delclaux 
 

Activist investor Elliott Management Corp. has raised its stake in Telecom Italia SpA (TIT.MI) to 8.8%, according to a regulatory filing on Monday, as it released a series of proposals to deliver additional value to shareholders.

Elliott said in a presentation to investors that the separation of Telecom Italia's fixed-access network into a separate legal entity, or NetCo--which would be 100% controlled by the Italian operator--could draw new investors and unlock as much as 7 billion euros ($8.59 billion) in "hidden value."

Through the creation of the NetCo and the disposal of subsea cable unit Sparkle, Telecom Italia would be positioned to reintroduce a dividend, Elliott said. It added that the company would be able to distribute EUR1.2 billion of dividend in 2019.

The activist fund said that an independent board could deliver actions which may double the stock price over the next two years.

The news comes as Elliott pressures Vivendi SA (VIV.FR), holder of a 24% Telecom Italia stake, for changes at the telecoms company. The power struggle between the two recently triggered the resignation of eight Vivendi-affiliated board members, forcing a complete reshuffle of the board.

Telecom Italia's board of directors is scheduled to meet Monday to discuss potential action after company auditors requested adding an Elliott-proposed motion to replace six Vivendi-affiliated board members to the agenda of its shareholders meeting on April 24.

Read more about the Telecom Italia tug-of-war at: https://on.wsj.com/2GKAIUX

Write to Marc Navarro Gonzalez at marc.navarro@dowjones.com and Alberto Delclaux at alberto.delclaux@dowjones.com

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(END) Dow Jones Newswires

April 09, 2018 10:52 ET (14:52 GMT)

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