MILAN (Reuters) – The new managing director of Telecom Italia (TIM) on Thursday praised the merits of the group’s plan to split up, presented as an alternative to the takeover bid by the American fund KKR, even though the telecoms operator suffered a record net loss last year and saw its share price plunge.
According to Pietro Labriola, KKR’s offer, which remains subject to many uncertainties, is close to the project developed by the group to split into two companies, one taking over its network activities and the other services.
The publication, late Wednesday evening, of the group’s financial results showed the extent of the problems it is encountering. The Italian operator posted a net loss of 8.7 billion euros in 2021, weighed down by asset impairments totaling 7.9 billion euros.
The group, which faces stiff competition in the Italian market, further said it would not pay a dividend for 2021.
In its new three-year plan, TIM said it expects stable Ebitda over the entire 2022-24 period, after an expected drop of around 10% to 12% in 2022, which bodes well for difficult year.
On the Milan Stock Exchange, TIM shares fell more than 13% on Thursday at midday and traded at 0.2991 euros, well below KKR’s offer of 0.505 euros per month. action.
“We believe that the magnitude of the loss in 2021 which leads to the absence of dividends as well as a cautious forecast for 2022-2024 comes as a surprise,” Intesa Sanpaolo analysts said in a note.
VALUABLE CREATION
TIM’s main shareholder, the French Vivendi, believes that the KKR offer is too low and Pietro Labriola assures that the plan to separate the network activities from the group’s other activities, such as those in Brazil, will help create value .
“Once KKR expresses interest in this award, you realize that the real value of the business is higher,” Pietro Labriola, who previously ran the subsidiary in Brazil, told reporters.
“If we do it internally, the value generated can probably be redistributed among all shareholders, majority and minority,” he added.
TIM said on Wednesday that its advisers would finalize their review of KKR’s offer shortly and the board would then make a decision.
KKR is already involved in the activities of TIM since the American fund paid 1.8 billion euros last year for a 37.5% stake in the secondary network of the Italian group, FiberCop.
Speculation has swirled that KKR might drop its takeover bid and settle for a stronger role in TIM’s new network business but Pietro Labriola said there had been no discussion about it with the funds.
(Report Elvira Pollina and Valentina Za; French version Valentine Baldassari, edited by Blandine Hénault)