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KKR makes non-binding $12 bln takeover proposal for Telecom Italia

  • Goal is to spin off fastened line, run it as govt-regulated asset
  • KKR targets TIM-Open Fiber grid merger however resolution with govt
  • Embattled TIM CEO pushing to revive single-network plan
  • Rival CVC, Advent additionally open to learning answer for TIM

MILAN, Nov 21 (Reuters) – Telecom Italia (TIM) (TLIT.MI) stated on Sunday its board had examined a non-binding proposal by U.S. fund KKR (KKR.N) geared toward taking Italy’s largest telephone group personal that valued it at 10.8 billion euros ($12 billion).

KKR’s proposal, which might provide a forty five.7% premium versus the closing worth of TIM’s unusual shares on Friday, comes as TIM’s CEO Luigi Gubitosi battles for survival after coming underneath fireplace from high investor Vivendi (VIV.PA) following two revenue warnings in three months.

Gubitosi introduced KKR onboard final yr in a 1.8 billion euro deal that handed the New York-based fund a 37.5% stake in FiberCop, the unit holding TIM’s last-mile community connecting avenue cupboards to individuals’s properties.

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TIM’s fastened line enterprise is its most prized asset and is deemed strategic by Rome, which has powers to dam any undesirable strikes.

Unable to stem TIM’s income haemorrhage, Gubitosi has began methods to squeeze cash out of TIM’s property, revisiting specifically a plan to merge TIM’s fixed-line grid with that of fibre optic rival Open Fiber.

Sponsored by the earlier authorities, that undertaking had run aground underneath Prime Minister Mario Draghi.

The PM’s workplace stated it was following the state of affairs.

The authorities is conscious of the necessity to shore up the debt-laden group at a time when it must step up investments, and defend its 42,500 home employees, sources have stated.

KKR’s plan would see TIM carve out its fastened community to be run as a government-regulated asset alongside the mannequin utilized by vitality grid firm Terna (TRN.MI) or fuel grid agency Snam (SRG.MI), two sources near the matter stated earlier on Sunday.

Separately personal fairness corporations CVC and Advent studied doable plans for TIM, working with former TIM CEO Marco Patuano, now a senior adviser to Nomura (7131.T) in Italy.

A spokesperson for the 2 funds stated they have been open to working with all stakeholders on an answer to strengthen TIM.

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Additional reporting and writing by Valentina Za; enhancing by Andrew Heavens, David Evans and Keith Weir

Telecom Italia's logo for the TIM brand is seen on a building in Rome, Italy, April 9, 2016. REUTERS/Alessandro Bianchi/File Photo

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