Vivendi, the largest shareholder of Telecom Italia (TIM) with a 24% stake, is appealing a recent ruling by an Italian court that dismissed its challenge against TIM's decision to sell its landline grid to a consortium led by KKR. The sale, valued at approximately €22 billion ($22.4 billion), was approved by TIM's board without a vote from shareholders, a move that Vivendi argues undermines its rights as a significant investor. The Milan court ruled that Vivendi lacked standing to contest the sale, stating that the company did not declare its voting intentions in the event of a shareholders' meeting, thus sidestepping the merits of the case altogether.

Vivendi's legal complaint, filed in December 2023, sought to annul the board's decision made on November 5, 2023, which authorized the sale of TIM's fixed network. The court's dismissal was based on procedural grounds rather than substantive issues regarding the legality of the sale itself. Vivendi contends that such a significant transaction should have been subjected to a shareholders' vote, as it fundamentally alters TIM's corporate structure and purpose. The company has expressed dissatisfaction with both the process and the terms of the sale, arguing for a higher valuation and greater transparency in decision-making.

In light of this ruling, Vivendi remains resolute in its position and plans to pursue an appeal. The company believes that the sale of TIM’s network should have undergone more rigorous scrutiny due to its implications for the company's future. Despite the court's technical dismissal, Vivendi asserts that it will continue to advocate for what it perceives as necessary governance practices within TIM. This appeal reflects broader concerns about corporate governance in Italy and the rights of minority shareholders in significant corporate transactions.

The implications of this legal battle extend beyond just Vivendi and TIM; they could influence investor confidence and regulatory scrutiny in Italy's telecommunications sector. As Vivendi evaluates its strategic options regarding its stake in TIM, including potential divestment, interest from private equity firms like CVC Capital Partners has emerged. Reports indicate that Vivendi may seek between €1 billion and €1.5 billion for its stake, although achieving this price may be challenging given TIM's current trading performance.