More than four months following receiving a takeover proposal from KKR, Telecom Italia has finally decided: the American fund will not have access to its accounts for a possible takeover bid (OPA).
The directors of TIM, meeting on Thursday, “decided unanimously not to consider it appropriate, at this stage, to follow up on the request for + due diligence +” submitted by KKR in November, indicates a press release from the group.
The fund was at the time declared ready to pay 10.8 billion euros for the acquisition of all of TIM, or 0.505 euro per share, a price significantly higher than the stock market price.
But the offer was deemed too low by the French media giant Vivendi, the main shareholder of Telecom Italia, which entered its capital in 2015 at an average purchase price of 1.071 euros per share.
– Dialogue of the deaf –
If Telecom Italia had indeed agreed in mid-March to begin “formal discussions” with the investment fund, these negotiations quickly turned into a dialogue of the deaf.
The incumbent has indicated that it only wants to grant a “due diligence of a purely confirmatory nature”, which means that it should be preceded by a formal offer.
But KKR asked the opposite: for him, there was no question of launching the slightest takeover bid without being able to go through the accounts of Telecom Italia, which have clearly deteriorated since his expression of interest.
Telecom Italia thus suffered an abysmal net loss of 8.65 billion euros in 2021, due to significant asset write-downs, an announcement which had plunged the title on the Milan Stock Exchange in early March.
At the same time as the accounts, the group’s new CEO, Pietro Labriola, had proposed a strategic plan perceived by the markets as an alternative solution to KKR’s offer, namely a split between the fixed telephony network and the services.
– Letter exchange –
In a letter, TIM had given the US fund until Monday evening to detail the terms and price of its non-binding proposal released in November.
In its response, KKR reiterated its request for access to its accounts, without confirming the amount of a possible takeover bid.
The Telecom Italia title closed Thursday up 2.16% at 0.312 euro on the Milan market, representing a market capitalization of 6.3 billion euros.
The Italian group has not completely closed the door to KKR: if the fund “decides to submit a concrete, complete and attractive offer” including an indication of the price, the board of directors of TIM “will be able to reconsider its decision “, he assures.
In the meantime, the operator will have to give an answer to another suitor, the investment fund CVC Capital Partners, which wishes to acquire a minority share in the future service company resulting from a possible split in the group.
This offer is considered “friendly” by Telecom Italia, especially since it concerns a minority share, the management and control continuing to be provided by TIM, a source familiar with the matter told AFP.
According to the Italian press, CVC has estimated the enterprise value of the activities in which it is interested at around six billion euros, while analysts have valued it at up to 10.5 billion euros.
At the same time, TIM announced on Saturday that it had signed an agreement with the Italian Caisse des dépôts (CDP) aimed at starting negotiations concerning a merger of its network with that of Open Fiber, in which the public bank holds a 60% share.
This project was relaunched in March by Mr. Labriola’s strategic plan, which aims to better promote each of the future entities born of a split, without giving up the autonomy of the group.
