Telefonica’s representatives on Telecom Italia’s (TI) board have stepped down as the Spanish incumbent looks to assuage the fears of Brazil’s antitrust regulator regarding its influence over the country’s mobile market.
CEO Cesar Alierta…
Telefonica’s representatives on Telecom Italia’s (TI) board have stepped down as the Spanish incumbent looks to assuage the fears of Brazil’s antitrust regulator regarding its influence over the country’s mobile market.
CEO Cesar Alierta and Julio Linares have resigned from their positions with immediate effect. Linares has also left his position within TI’s controlling shareholder group Telco.
Alierta and Linares previously left the room when TI’s board came to discuss its Brazilian operations. In a statement Telefonica said it had taken the decision “to reinforce [its] strong commitment with the previous obligations undertaken by Telefonica to remain separate from Telecom Italia’s Brazilian businesses”.
Earlier this month, Cade fined Telefonica and said it had to lessen its influence in Brazil’s mobile market. It told the Madrid-based telco it could not hold both its current direct stake in Vivo and its indirect holding in TI subsidiary TIM Brasil.
Cade said that Telefonica must either reduce its stake in TI’s controlling shareholder Telco – which it took control of in September, thus giving it sway over TIM – or find a new partner to take joint-control of its direct subsidiary Vivo.
In its statement Telefonica said that Cade’s position was “unreasonable” and therefore was looking at potentially launching legal actions.
BlackRock boosts stake in TI
Meanwhile US investment giant BlackRock has taken its stake in TI to 10.14%, according to a regulatory filing last week with the US Securities and Exchange Commission.
However the fund did not inform the Italian markets regulator Consob, its chairman was quoted as saying. Italy has a 10% ownership threshold beyond which investors are required to notify the authorities of their position.
Yet in a statement to Consob today BlackRock denied that it had crossed the threshold and disclosed 7.78% of TI’s voting shares.
“BlackRock believes that no breach occurred of the relevant Italian applicable laws and regulations relating to relevant holdings in [TI],” it said in its statement.
A report suggested that the 10.14% figure included convertible bonds, which the SEC counts as equity but the Italian authorities do not.
BlackRock has nonetheless become the operator’s second largest shareholder after Telco. It will therefore play a significant role in a shareholder vote scheduled for Friday where investors will be balloted on whether they think TI’s board should be removed.
The idea of ousting the board was put forward by Marco Fossati, who owns around 5% of TI’s stock. In recent weeks the proposal has gained the support of influential proxy advisers ISS and Glass Lewis.
