KKR makes a run at Telecom Italia

Nov. 22, 2021
Any purchase agreement would be subject to acceptance by 51% of shareholders for both classes of shares. Observers expect major investor Vivendi to consider the KKR bid inadequate.

The board of Telecom Italia (TIM) met yesterday to consider a takeover proposal they say they received from investment firm Kohlberg Kravis Roberts & Co. L.P. (KKR). The bid, which was termed “non-binding and indicative,” contained an offer of 0.505 euros per ordinary and/or savings share, which media reports stated would make the company worth 10.8 billion euros ($12.2 billion), not including any debt assumption. The board did not indicate whether they planned to accept the proposal.

The board said that KKR termed the offer “friendly” and therefore seeks the approval of TIM’s directors and company’s management. The offer is conditional and subject to an estimated four-week period of due diligence as well as clearance by government stakeholders. The Italian government has the right to scuttle the deal because the company’s network is considered of national importance, TIM’s board noted.

Any purchase agreement also would be subject to acceptance by 51% of shareholders for both classes of shares. Observers expect major investor Vivendi to consider the KKR bid inadequate.

The bid for TIM is the latest example of foreign private capital seeking to enter the Italian telecommunications market. Macquarie of Australia recently saw their agreement to purchase a stake in wholesale broadband network operator Open Fiber approved by the European Commission (see “European Commission approves CDP/Macquarie takeover of Open Fiber”). This deal could pave the way for a tie up between TIM and Open Fiber as CDP, Macquarie’s partner in the Open Fiber purchase, also owns a stake in TIM.

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