KKR launches $ 12 billion non-binding takeover bid for Telecom Italia


A KKR logo is displayed on the floor of the New York Stock Exchange (NYSE), August 23, 2018.

Brendan McDermid | Reuters

Telecom Italia (TIM) said on Sunday that its board of directors had considered a non-binding proposal by US fund KKR to privatize Italy’s largest telephone group, which valued it at 10.8 billion euros (12 billion euros). dollars).

KKR’s proposal, which would offer a 45.7% premium over TIM’s closing common stock price on Friday, comes as TIM CEO Luigi Gubitosi fights for his survival after being criticized by the principal Vivendi investor after two profit warnings in three months.

Gubitosi joined KKR last year in a € 1.8 billion deal that gave the New York-based fund a 37.5% stake in FiberCop, the unit owning the latter’s network. kilometer of TIM connecting street cabinets to people’s homes.

TIM’s landline business is its most valuable asset and is viewed as strategic by Rome, which has the power to block unwanted movement.

Unable to stem TIM’s revenue drain, Gubitosi began looking for ways to extract money from TIM’s assets, in particular revisiting a plan to merge TIM’s fixed network with that of its rival. Open Fiber optic fiber.

Sponsored by the previous government, this project had failed under Prime Minister Mario Draghi.

The prime minister’s office said it was monitoring the situation.

The government is aware of the need to support the indebted group at a time when it must scale up investments and protect its 42,500 domestic workers, sources said.

KKR’s plan would see TIM create its fixed network to be managed as a government-regulated asset based on the model used by energy grid company Terna or gas grid company Snam, two sources close to the government said on Sunday. case.

Separately, private equity firms CVC and Advent explored possible plans for TIM, working with former TIM CEO Marco Patuano, now a senior advisor to Nomura in Italy.

A spokesperson for the two funds said they were ready to work with all stakeholders on a solution to strengthen TIM.


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