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Vivendi opposed 22 bln euro network sale

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Paris-listed group said shareholder vote was needed

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Vivendi intends to appeal the court decision

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Vivendi open to selling TIM stake, PE firms studying file

(Updates with Vivendi intention to appeal in paragraph 5;

details, background in paragraphs 7, 11-16)

By Elvira Pollina and Emilio Parodi

MILAN, Jan 14 (Reuters) - An Italian court on Tuesday

rejected a request by Telecom Italia's top investor

Vivendi to annul the former phone monopoly's decision

to sell its landline grid to a consortium led by KKR.

France's Vivendi, which holds a 24% stake in TIM, filed a

complaint with a Milan court in December 2023, arguing that the

decision by TIM's board to approve the deal, worth up to 22

billion euros ($22.4 billion), was illegitimate.

Telecom Italia said at the time the board had acted within

its rights. The deal was finalised last July.

The court said in a statement on Tuesday that Vivendi did

not have grounds to pursue a legal action.

Vivendi said it intended to appeal the decision, saying the

court had not addressed the merits of the case. It said it

continues to believe that the sale of the network should have

been subject to a vote at a shareholders meeting.

A Telecom Italia spokesperson declined to comment on the

court ruling.

The sale of TIM's most valuable asset is part of a plan to

reduce the former phone monopoly's debt pile and stabilise its

finances. It has the backing of Giorgia Meloni's right-wing

government, which has taken a 16% stake in the network.

Vivendi viewed the selling price of the network as too low

and questioned the sustainability of the business left behind.

It said an extraordinary shareholder vote was needed to

approve the sale, arguing the deal had changed the company's

nature and any dissenting shareholders had the right to withdraw

by selling their shares back to the company.

EXIT?

After a round of fruitless talks with Rome over TIM's

future, Vivendi took a back seat as an investor and in January

2023 withdrew its representative on the board.

The Paris-listed group has signalled it is open to selling

its stake in TIM, which has a value of about 950 million euros

at current market prices, as it no longer considers it

strategic.

The file has drawn interest from private equity firms,

including CVC, according to people familiar with the

matter.

However, any transaction needs support from the Italian

government, which has the power to vet any sale of more than 3%

of the company.

Italian state lender CDP is the second-largest investor in

TIM, with a 10% stake.