The French group Vivendi is the main shareholder of Telecom Italia (TIM) (AFP/Archives/Miguel MEDINA)
The board of directors of Telecom Italia (TIM) asked the American investment fund KKR on Friday to revise upwards its offer submitted in early February to acquire a majority stake in the fixed network of the Italian operator.
The board “strongly appreciated the interest expressed” for the network, while considering that the offer “does not fully reflect the value of the asset”, indicates the group in a press release.
The offer is “appreciated, but to be improved”, decided Telecom Italia, setting the deadline for a new proposal at March 31.
KKR had submitted a non-binding offer to acquire a majority stake in a future TIM company combining its fixed network and submarine cables, valuing it at more than 20 billion euros.
However, the French group Vivendi, the main shareholder of Telecom Italia with a 23.75% share, had set the bar higher, claiming a valuation of up to 31 billion euros.
TIM announced on Tuesday that it had received a letter from KKR extending the deadline for its offer by one month, until March 24.
The extension of the deadline “is due to a request by the government for an additional four weeks” to analyze the transaction in light of the powers it has in the sector, according to KKR.
Giorgia Meloni’s government will have its say insofar as it has special powers (“golden power”) in sectors considered strategic, such as telecommunications.
The Italian State is also the second largest shareholder in Telecom Italia, through the 9.81% share held by the Italian Caisse des dépôts (CDP).
– Next counter-offer?
The markets are counting on an upcoming counter-offer from CDP, associated with the Australian investment fund Macquarie, whose preparation seems to be taking longer than expected.
TIM indicated on Friday that it wanted to “make available to KKR, on a non-exclusive basis, certain specific information” with a view to improving its proposal, while leaving the door open to an offer from CDP.
The board of directors also intends to ask KKR for “additional information necessary to fully understand” its offer.
“We are ready to dialogue with the board in order to cooperate in accordance with the strategic objectives of TIM”, reacted a spokesperson for KKR.
KKR had offered in November 2021 to buy all of Telecom Italia for 10.8 billion euros, but this offer had been deemed too low by Vivendi.
The fund is already a 37.5% shareholder in FiberCop, Telecom Italia’s network operator.
The government has repeatedly stated its objective of creating “a national network under public control”, which seemed a priori incompatible with KKR’s proposal.
But the fund’s offer does not prevent the participation of a public entity which could take control on an operational level, according to a financial source.
Rome had blocked in November a plan to buy CDP from the TIM network, effectively suspending the preliminary agreement to this effect concluded in May between the public bank and Telecom Italia.
This agreement, negotiated under the aegis of the former government of Mario Draghi, provided for the merger of TIM’s network with that of its competitor Open Fiber, in which CDP and Macquarie hold 60 and 40% respectively.
The negotiations between the CDP and Telecom Italia had notably come up against the price of the network, deemed too high by the State.
© 2023 AFP
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