Telecom Italia to resolve on KKR method by mid-March

MILAN, Feb 22 (Reuters) – Telecom Italia (TIM) (TLIT.MI) is anticipated to decide on a ten.8 billion euro ($12.2 billion) takeover proposal from U.S. non-public fairness agency KKR (KKR.N) by the center of subsequent month.

The U.S. non-public fairness fund made a non-binding method to take the previous cellphone monopoly non-public final November. It sought the backing of the corporate and the federal government, in addition to a four-week due diligence course of earlier than it formalised a bid.

However KKR has been pressured to play a ready sport as Telecom Italia overhauled its administration, ousting its fourth chief government in six years after a string of revenue warnings.

New boss Pietro Labriola is engaged on a standalone plan to be offered to buyers subsequent week as a substitute for a KKR deal, with the backing of Telecom Italia high buyers Vivendi (VIV.PA) and state lender CDP.

A particular committee inside TIM is anticipated to offer its verdict on the KKR method by mid-March, a supply near the matter informed Reuters on Tuesday, as soon as buyers and markets have had an opportunity to digest Labriola’s plan.

BREAKING UP

KKR already has a task inside TIM, having spent 1.8 billion euros final yr for a 37.5% stake within the group’s secondary community, often called FiberCop.

Below Labriola’s draft plans, TIM’s home enterprise could be cut up between an infrastructure entity and a companies arm to unlock worth.

Such a transfer may facilitate a long-mooted merger of TIM’s fixed-access community with state-backed rival Open Fiber, a deal advocated by CDP and one that might enhance broadband companies for Italian households and companies. The state lender owns a 60% stake in Open Fiber and 10% of TIM.

KKR for its half desires Telecom Italia to give you a transparent response to its method earlier than the Italian group embarks by itself restructuring.

“The corporate should take duty for saying ‘No’ to 0.505 euros a share. KKR expects a solution to its proposal,” mentioned one other supply near the matter.

TIM shares traded under 0.40 euros on Tuesday, however main shareholder Vivendi says the bid is simply too low as a result of it could crystallise a loss on its funding.

Italian unions are additionally involved in regards to the affect of a break-up on 1000’s of employees and plan a strike on Wednesday.

($1 = 0.8828 euros)

Writing by Keith Weir
Modifying by David Goodman

Our Requirements: The Thomson Reuters Belief Ideas.