© Reuters. PHOTOGRAPHY: The TIM logo can be seen at its headquarters in Rome, Italy, November 22, 2021. REUTERS / Yara Nardi / File Photo
Author: Elvira Pollina
MILAN (Reuters) -Telecom Italia (TIM) announced on Friday that former CEO Luigi Gubitosi has resigned from the company’s management, removing an obstacle that prevented Italy’s largest telephone group from naming his successor.
The board crisis has hampered the group’s response to a $ 37 billion takeover approach from US private equity fund KKR, which is awaiting access to TIM’s data before making an official offer.
TIM said it was conducting a “thorough assessment” of the offer, but also “reviewing other strategic alternatives … in order to decide, among other things, whether to give access to due diligence requested by KKR”.
TIM also said the search for a new chief executive continues, but gave no indication of when it could appoint a new chief.
KKR’s offer is conditional on the support of the company’s management and the Italian government, but TIM’s largest shareholder Vivendi (OTC 🙂 said it does not reflect TIM’s value.
A French media group is studying an alternative plan, sources said earlier.
Both strategies envision separating TIM’s services from its infrastructure assets, which requires investment in upgrades as part of the country’s multibillion-dollar digital movement.
The contract with TIM provides a severance pay for Gubitos of about 6.9 million euros ($ 7.8 million) that will be settled by January 3, the company said in a statement.
Gubitosi resigned as chief executive last month after being pressured by Vivendi and losing the trust of most board members, following a series of profit warnings.
But Gubitosi did not step down as director of the board, which prevented TIM from appointing a new executive director until he gets a vacancy on the board.
Last month, TIM appointed https://www.reuters.com/markets/deals/kkr-offer-prompts-telecom-italia-board-showdown-over-ceos-future-2021-11-26 Pietro Labriolu, the head of his esteemed Brazilian business, as the CEO and sources said he was expected to be appointed executive director once a board seat became available.
But sources familiar with the process said there are differing views in the committee on who would be the best candidate for long-term stable leadership.
The team hired bounty hunter Spencer Stuart, who compiled a list of possible candidates for CEOs.
“The board of directors … is continuing the succession planning process with the goal of appointing a new executive director and will complete it as soon as circumstances allow,” TIM said.
(1 dollar = 0.8898 euros)
(Additional reporting and writing by Valentina Za, Sneha Bhowmik in Bengaluru, Agnieszka Flak in Milan Editing by Elaine Hardcastle, Rosalba O’Brien and Mark Potter)
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