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3 months ago
UPDATE 1-Telecom Italia keeps Recchi in place as executive chairman
May 5, 2017 / 2:37 PM / 3 months ago

UPDATE 1-Telecom Italia keeps Recchi in place as executive chairman

* Incumbent Recchi kept on as chairman

* Vivendi CEO remains his deputy

* Vivendi has notified EU authorities over stake (Wraps separates, adds details, Vivendi comment, analyst)

By Agnieszka Flak and Foo Yun Chee

MILAN/BRUSSELS, May 5 (Reuters) - Telecom Italia on Friday confirmed Giuseppe Recchi as executive chairman in a sign that top shareholder Vivendi was treading a cautious line ahead of an EU ruling over whether it can control Italy's biggest phone group.

The appointment came a day after the French media group tightened its grip on Telecom Italia by appointing 10 directors out of 15 to the board of the Italian company.

Vivendi, which owns 24 percent of Telecom Italia, had put its CEO Arnaud de Puyfontaine top of its list of candidates for the Italian firm's board, which in Italy usually indicates the proposed chairman.

However, three sources close to the matter had told Reuters that Recchi would be confirmed in the job for now as Vivendi waited for a European ruling on its sway over Telecom Italia.

De Puyfontaine was re-confirmed as Recchi's deputy.

"If they had appointed de Puyfontaine as chairman, there would have been no question of who is in control, so this suggests Vivendi is taking a step back, awaiting developments, and Recchi's reappointment could be temporary," said Sergio Carbonara, founder of small proxy advisor Frontis Governance.

Recchi has been in the role for three years but the board's mandate expired on Thursday.

The choice of Telecom Italia's next chairman is politically sensitive because it could aggravate concerns in Rome about Vivendi's growing influence over Italian companies.

Vivendi -- which says its stake in Telecom Italia is part of its strategy to build a southern European media empire -- filed a pre-emptive notification to the European Commission on March 31, saying that after the shareholder meeting it could have de facto control of Telecom Italia.

The French group submitted another filing on Thursday with the Commission, offering concessions to try to address EU antitrust concerns on the matter, the EU competition website showed, without providing details.

Companies usually offer concessions if the regulator has concerns that a transaction may harm rivals and consumers.

The Commission has extended the deadline for it to make a decision on the matter to May 30 from May 12.

Leaving Telecom Italia's board meeting on Friday, de Puyfontaine declined to comment on the concessions, only adding the "process is under way".

The French group's influence over the Italian telecoms group has come under the spotlight after it took a 29 percent holding in Italian broadcaster Mediaset, leading to speculation over whether it planned to combine the two companies.

That angered Mediaset shareholder Fininvest, the investment holding of the family of former prime minister Silvio Berlusconi, and raised concerns in Rome about Vivendi Chairman Vincent Bollore's ambitions.

Bollore is also a key shareholder in influential Italian investment bank Mediobanca, which controls insurer Generali.

Italy's communications watchdog AGCOM last month ordered Vivendi to cut its stake in either Telecom Italia or Mediaset within a year, saying it was in breach of rules designed to prevent a concentration of power in the telecoms and media sector. (Additional reporting by Stefano Rebaudo in Milan and Mathieu Rosemain in Paris; Editing by Keith Weir)

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