By Agnieszka Flak and Stefano Rebaudo
ROZZANO, Italy (Reuters) - Board nominations by activist fund Elliott secured two thirds of Telecom Italia's seats after a shareholder vote on Friday, weakening the influence of top investor Vivendi at Italy's biggest phone group.
Five of Vivendi's candidates, including current TIM boss Amos Genish and the French media group's CEO Arnaud de Puyfontaine, will still be part of the board, so the two adversaries will have to find a way to bury the hatchet and work together to turn around the slumbering telecoms heavyweight.
But the big question remains whether Genish, a Vivendi ally but well respected by Italy's government and other investors, will decide to stay on as TIM's boss.
The new TIM board is expected to decide on whom to appoint chief executive and chairman in the coming days.
"Vivendi is there for the medium and long term, Vivendi is supporting Amos Genish in his industrial strategy," a Vivendi spokesman said on the sidelines of the meeting.
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"We will be very vigilant to ensure that the independent directors elected with Elliott's slate don't push for the break-up of TIM."
Activist fund Elliott in March launched a campaign to end Vivendi's grip over TIM. It has built a stake of 9 percent in the former state phone monopoly to try to shake up the way top investor Vivendi - which owns 24 percent - runs it.
Elliott is stepping up its activities in Europe, as it sees more opportunities to unlock value by pushing through management changes, company break-ups and merger deals.
INVESTORS CLASH
The two investors have been at loggerheads for two months, 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.
Since becoming a shareholder in 2015, Vivendi had gradually tightened its grip on TIM, appointed the majority of its board last year and named its own CEO as TIM's executive chairman - all in the name of French tycoon Vincent Bollore's stated ambition to build a southern European media powerhouse.
Two TIM CEOs left because of clashes with the French investor.
The hands-on approach has led to friction with Rome, concerned about an asset it considers of strategic importance, and has unnerved other investors at the telecoms group.
Vivendi also brought in Genish, who managed to impress investors and the government in Rome, and whose ambitious new three-year strategy, presented in March, was welcomed.
Despite being a Vivendi ally, Genish is well respected for his track record in the telecoms industry.
Friday's vote was called after the majority of directors resigned in March, triggering a full reshuffle.
The new board will include the 10 Italian business heavyweights put forward by Elliott and five directors from Vivendi's slate, including De Puyfontaine and Genish.
Proxy advisers recommended backing Elliott's list, saying Vivendi had been damaging for governance and investor returns.
The vote was close given the size of Vivendi's stake.
Some 49.84 percent of the shareholders present at the meeting voted in favour of the Elliott list, while 47.18 percent voted in favour of Vivendi.
(Editing by Keith Weir)