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Telecom Italia CEO says his position ‘untenable’ if Elliott wins…

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MILAN (Reuters) – Telecom Italia (TIM) CEO Amos Genish said his position at Italy’s biggest phone group would be “untenable” if activist fund Elliott manages to win the majority of board seats at a shareholder vote on Friday, according to a newspaper interview.

Elliott has built a stake of 9 percent in the former state phone monopoly to try to shake up the way top shareholder Vivendi – which owns 24 percent – runs it.

The two investors have been trading blows for the past eight weeks, with Elliott accusing Vivendi of serving only its own interests and the French media group saying the fund was looking only for short-term financial gains.

“The issue for me isn’t about which side I’m on,” Genish, who was brought in last year by Vivendi, told The Sunday Telegraph.

“I am the CEO of Telecom Italia and I am on Telecom Italia’s side. The question is whether or not I have shareholders and a board who stand behind the business plan.”

Elliott could not immediately be reached for comment.

On May 4, TIM shareholders will meet to elect an entire new board after the majority of directors resigned last month, triggering a full reshuffle. They will have to pick between Elliott’s slate of 10 independent Italian business heavyweights and Vivendi’s list, which did little to allay governance concerns, but features Genish.

This might prove a conundrum for some investors who may want to weaken Vivendi’s grip but will not want to lose the CEO, who presented his 3-year business plan last month.

At a separate vote last Tuesday, nearly 98 percent of shareholders present at a general meeting backed the new CEO who is well respected for his track record in the telecoms industry and as a dealmaker in Brazil.

“I can’t see how a CEO could implement a plan he doesn’t believe in,” Genish said.

Elliott has repeatedly said it fully supported Genish and wants him to stay on after the board renewal, although several proposals made by the activist investor clash with that of the current management.

TIM’s management has defended its own strategy, saying alternative moves proposed by Elliott were premature, unfeasible and carried financial and execution risks.

Should Elliott win the majority, Vivendi could still appoint five board members one of whom would be Genish. However, the Israeli-born executive may choose not to stay on.

“If the Vivendi slate does not get the majority of votes, because this is clearly the only slate to support our long-term industrial plan, I firmly believe my position as CEO would be untenable,” Genish told the paper.

New York-headquartered Elliott Management Corp was founded by U.S. billionaire Paul Singer and manages two funds with combined assets under management of about $35 billion. Its push for change at Telecom Italia is being spearheaded by London-based affiliate Elliott Advisors (UK).

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