Through

Reuters

on 11.21.2021 at 11.59 a.m.

3 min read

MILAN (Reuters) – Telecom Italia (TIM) announced on Sunday that its board of directors has considered a non-binding $ 12 billion (€ 10.8 billion) offer from US fund KKR to privatize telecom operator .

KKR’s offer represents a 45.7% premium over Friday’s closing price and comes as TIM’s managing director, Luigi Gubitosi, is being pushed around, in particular by its first shareholder Vivendi, following two warnings on results in three months.

TIM’s board, chaired by Salvatore Rossi, met for several hours on Sunday afternoon and, in a brief statement, did not say whether it would support the offer, which it described as “friendly. “by KKR.

The Italian Treasury said that the interest of foreign investors in domestic companies was “positive news for the country”.

“The government will closely monitor developments (…) and carefully assess (…) (TIM’s) infrastructure projects,” the Treasury said.

In 2020, the private equity group KKR acquired a 37.5% stake in the so-called “last mile” fixed network (Fibercop), the one leading to the customer, of Telecom Italia.

KKR’s plan would see Telecom Italia isolate its fixed network to be managed as a government-regulated asset based on the model used by Terna or Snam, two energy network operators, said two sources familiar with the matter.

Unable to stem the group’s revenue drain, Luigi Gubitosi began looking for ways to leverage TIM’s assets, including studying a failed merger project between its core assets. of fixed telephony and those of its rival Open Fiber.

Vivendi, who is pushing to replace Luigi Gubitosi, believes KKR’s offer does not sufficiently value TIM, a source close to the French media group said.

A spokesperson said Vivendi remained ready to work alongside Italian authorities and institutions for the long-term success of the Italian group.

At the same time, private equity firms CVC and Advent explored possible projects for TIM, working with Telecom Italia’s managing director, Marco Patuano, now an advisor at Nomura. A spokesperson for the two funds said they were open to working with all stakeholders on a solution to strengthen TIM.

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