Telecom Italia board to debate community spinoff in slow-burn KKR drama


Telecom Italia’s Pietro Labriola poses for a portrait subsequent to the corporate’s identify at TIM headquarters in Rome, Italy, January 17, 2022. REUTERS/Guglielmo Mangiapane/File Picture

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MILAN, Feb 11 (Reuters) – The board of Telecom Italia (TIM) (TLIT.MI) will focus on the group’s overhaul on Monday as newly appointed chief government Pietro Labriola strives to forge an alternative choice to a takeover proposal by U.S. fund KKR (KKR.N).

The personal fairness group approached Italy’s greatest telecom operator in late November however the course of stalled whereas Telecom Italia modified its CEO, and Italy went by means of the method of reelecting its president.

Labriola, who beforehand ran TIM’s Brazilian enterprise, is now engaged on a standalone plan in response to the ten.8 billion euro ($12.30 billion) bid from KKR, which TIM’s prime shareholder, French media firm Vivendi (VIV.PA), has stated was too low.

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Below stress for years from competitors at dwelling and after a string of revenue warnings final 12 months, debt-laden TIM is contemplating splitting its community belongings right into a separate firm as a part of a broader revamp of its enterprise.

That might pave the way in which to a protracted mentioned merger of TIM’s infrastructure belongings with these of state-owned rival Open Fiber, a transfer advocated by state lender CDP, TIM’s second largest investor.

Italy’s important telecom unions known as on Friday for a normal strike on Feb. 23 and additional motion in protest towards the potential spin off, elevating issues about its potential fallout on jobs. learn extra

TIM’s future is politically delicate as a result of the Italian authorities needs to make use of European Union funds to enhance broadband entry for thousands and thousands of households and companies as a part of its post-pandemic restoration.

Whereas it waits to see if KKR formalises its bid, Italy’s Treasury could be ready to permit the fund to play a task within the telecom’s overhaul, two folks near the matter informed Reuters. Final 12 months, KKR already invested 1.8 billion euros in a 37.5% stake in TIM’s secondary community.


Below Labriola’s plan, which the board is predicted to approve on March 2, TIM would give attention to its client enterprise, whereas enhancing its supply for company shoppers and growing cloud, Web of issues and cybersecurity companies.

Sources have beforehand stated it was unlikely TIM would take any agency stance on the KKR proposal earlier than early March.

Telecoms operators throughout Europe are methods to reinvigorate their operations, with bankers reporting talks in a number of international locations as firms gear up for the roll-out of high-priced new 5G companies.

Britain’s Vodafone (VOD.L) stated on Thursday it had rejected a preliminary method for its Italian enterprise from France’s Iliad and Apax Companions. That mixture would have challenged TIM’s place as Italy’s largest cell phone firm. learn extra

($1 = 0.8782 euros)

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Further reporting by Giuseppe Fonte in Rome
Writing by Keith Weir
Modifying by Tomasz Janowski

Our Requirements: The Thomson Reuters Belief Ideas.

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