KEY POINTS:
Elliott International - the New York investment firm that made a fortune last year by betting big on the US property slump - doesn't look like a particularly patient sort of player.
Its move to hijack Telecom's board and push for more complete structural separation is an example of the hostile investor activism we're often told New Zealand needs more of.
But that doesn't mean local investors are going to like it.
Elliott has made its name as an outfit that isn't afraid to buy into troubled companies and lobby vociferously for the kind of change that will best suit its agenda.
Elliott's founder Paul Singer - a billionaire investor and fundraiser for Rudolph Giuliani - has been dubbed the "vulture investor" by some in the US press.
To be fair, that agenda seems to be firmly focused on financial return - so it is presumably not too far removed from that of Telecom's long-suffering small shareholders.
Which is why Elliott is likely to prove a thorn in Telecom's side in the run-up to the AGM on October 2.
Even if it has little of the support it needs to get its two candidates on to the board, it does have a reputation for making money. So there will be plenty of disgruntled fund managers ready to hear what it has to say.
Elliott is understood to have already begun lobbying the major Telecom stakeholders - the likes of Axa, Lazard, Commonwealth Bank and Macquarie Bank.
But it is yet to give away much in the way of detail about its alternative strategy for Telecom.
Also, it hasn't yet done much talking to the smaller New Zealand-based institutions that still hold a sizeable chunk of Telecom shares. Yesterday the local market was largely unsure of what to make of this left field call to arms.
And for that matter what to make of the two smart, 40-ish Massey University graduates - board nominees Tume and Cross - that have been named as Elliott's preferred Telecom saviours.
Telecom chairman Wayne Boyd is understood to have been considering adding another couple of directors to the board anyway so the prospect of a head-to-head battle is shaping up.
Boyd has also been out and about meeting major stakeholders in the past few months.
He has been at least partially successful in buying Telecom some much needed sympathy. He has sold a story of a company which is going through an almost unprecedented amount of change at a pace which is far from sluggish.
Elliott will certainly have some work to do if it wants to pull off this coup. But the message it sent Telecom's board and management yesterday was ominous. It plans to seriously test the strength of support for the current regime.
