Telecom Italia to appoint Labriola as CEO

by Elvira Pollina

MILAN (Reuters) – Telecom Italia (TIM) is expected to appoint chief executive Pietro Labriola as managing director on Friday, as the Italian telecoms operator continues to study the proposed takeover of U.S. fund KKR.

Labriola, who has led TIM’s Brazilian operations for the past three years, was named chief executive last November and multiple sources told Reuters he was favorite to succeed former chief executive Luigi Gubitosi. , forced to resign by shareholders after several profit warnings.

Under pressure for years due to its heavy indebtedness and an increased competitive environment, TIM must modernize its network to meet Italy’s ambitions in terms of high-speed telecommunications.

The group’s main investor, French media giant Vivendi, backs Labriola’s appointment.

The Vincent Bolloré-led group, which owns a 24% stake in TIM, criticized the 10.8 billion euro ($12.2 billion) offer filed by KKR, saying it does not reflect the value of the leading Italian telecommunications operator.

Public body Cassa depositi e prestiti (CDP), TIM’s second-largest shareholder, is also expected to back Labriola’s appointment at a board meeting on Friday, according to people familiar with the matter who requested anonymity. .

According to a preliminary version of a plan to reorganize the group, presented to the board of directors this week, Labriola proposed to separate the company’s fixed network activities from its services activities, the sources said.

The new company, which would combine the infrastructure assets of TIM, would focus solely on wholesale activities. It would include the Sparkle subsidiary specializing in submarine cables and would assume a large part of the group’s debt and workforce, the sources said.

Such an operation could help relaunch the project to merge the assets of TIM’s fixed network with those of its rival Open Fiber, which is 60% owned by CDP.

KKR’s takeover proposal is conditional on the support of TIM’s board and the Italian government, which views the group’s network infrastructure as strategic and has special powers to block interests deemed undesirable.

(Report Elvira Pollina, French version Federica Mileo, edited by Blandine Hénault)

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