MILAN: Telecom Italia (TIM) on Sunday said its board has examined a non-binding proposal by US fund KKR aimed at keeping Italy’s biggest phone conglomerate private, valued at 10.8 billion euros (12 billion). dollars).
KKR’s proposal, which will offer a 45.7% premium to the closing price of TIM ordinary shares on Friday, comes as TIM CEO Luigi Gubitosi is facing fire from top investor Vivendi after two profit warnings in three months. The latter struggles for existence.
Gubitosi onboarded KKR last year in a 1.8 billion euro deal that handed the New York-based fund a 37.5% stake in Fibercop, the entity connecting TIM’s last-mile network to people’s homes.
TIM’s fixed line business is its most prized asset and is considered strategic by Rome, which has the power to block any unwanted moves.
Unable to stop TIM’s revenue bleeding, Gubitosi has begun to look at ways to extract money from TIM’s assets, particularly revisiting TIM’s plan to merge fixed-line grids with fiber optic rival OpenFiber. to think.
Sponsored by the previous government, the project was run under Prime Minister Mario Draghi.
The PM’s office said it was following the situation.
Sources said the government is aware of the need to sideline the debt-ridden group at a time when it needs to increase investment and protect its 42,500 domestic workers.
KKR plans to build its fixed network to run TIM as a government-regulated asset with the model used by energy grid company Terna or gas grid firm Sanam, two sources close to the matter said earlier on Sunday. .
Separately, private equity firms CVC and Advent studied potential plans for TIM, working with former TIM CEO Marco Patuano, who is now a senior advisor to Nomura in Italy.
A spokesperson for the two funds said they stand ready to work with all stakeholders on a solution to strengthen TIM.
(Additional reporting and writing by Valentina Za; Editing by Andrew Heavens, David Evans and Keith Weir)
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