Is that of Kkr really a big offer for the Tim network?
What people say and what they don't say about the offer of the American fund Kkr on the Tim network. Facts, numbers and rumors
But is that of the American fund Kkr for Tim's network really a big offer – that is, an offer which is difficult to say no to?
Or with the same numbers – and perhaps with some governmental trick – can CDP with the Macquarie fund also present an offer soon?
These are the salient questions circulating in government circles after the move by the US fund and the words of the Minister of Economy, Giancarlo Giorgetti,
Here are the latest news and the latest rumors.
KKR'S PROPOSAL ON THE TIM NETWORK
Kkr has put an offer of 18 billion euros on the plate for the Telecom Italia network. In fact, the Kkr proposal provides for an earn out (compensation) of 2 billion, which raises the offer to 20 billion, in the event that the EU gives the green light to the merger between the Tim network with that of its rival Open Fiber, 60% controlled by the Cassa and 40% by the Macquarie fund, underlined the Repubblica newspaper.
THE NUMBERS OF KKR'S OFFER: OFFERTONA?
Offertana that of the Americans? Not so. First: you write 18 billion but you have to read 13-14 billion – notes an analyst familiar with the dossier – given that the Kkr fund has 37.5% of Fibercop. In 2020, the US fund had valued Fibercop 7.7 billion in the act of acquiring a minority stake of 37.5% from Tim. Second: Kkr's assessment is substantially in line with all advisor assessments. In fact, at the time of the Single Network project – during the Draghi government – there was talk of a CDP offer of 16-17 billion.
KKR'S EVALUATIONS ON TIM'S ASSETS
Now – according to the reconstruction of Repubblica – Kkr values the Sparkle submarine cable company at 1.25 billion, the primary network that goes from the power stations to the cabinet at 6.75 billion and the secondary Fibercop network which from the cabinets enters the homes of all Italians 10 billion.
TIM'S NOTE
Yesterday evening the top management of Tim, after discussions with Consob, released a "clarification" by putting some information on paper: a non-binding offer from Kkr valid for 4 weeks starting from 1 February and which will therefore be examined by the Board of 24 February. «The non-binding offer, as is normal for operations of this type – we read – is only indicative and subject to further investigations, analyzes and evaluations which will be conducted in the meantime, also by speaking with Kkr. On the other hand, as already disclosed, Tim is ready to consider other alternative options.
THE GOVERNMENT'S POSITION ON KKE AND RETE TIM
The Meloni government, however, has spent a lot on the idea of a publicly controlled network and can always move the Golden Power lever (while the Draghi government, without resorting to any de facto rule, froze the first move of Kkr).
THE WORDS OF MINISTER GIORGETTI (ECONOMICS) ON TIM AND KKR
Moreover, the words of the owner of the Ministry of Economy, which controls Cassa depositi e prestiti, are significant. "I believe that we will not be able to judge the offer of Kkr, which we still do not know in detail – said the minister Giancarlo Giorgetti – exclusively according to the principles of profitability or profit because the network is a strategic infrastructure for the country and it is in this I expect that we need to understand how general interests are guaranteed". In short, first the general interests and then the particular interests (of the funds)
THE MOVES OF CDP SECOND REPUBLIC
Cdp, which was already assisted by Credit Suisse, also engaged Bofa to issue a fairness opinion and help it in the eventual financing of the operation. Together with Macquarie, with the possibility of subsequently opening the capital to other funds (Brookfield according to Repubblica and Blackstone according to Il Sole 24 ore ), CDP would like to bring the approval of the non-binding offer for the Tim network to the board of directors scheduled for 23 February, or rather on the eve of Tim's board meeting on February 24 which will have to express itself on the offer of Kkr, added Repubblica.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/e-davvero-unoffertona-quella-di-kkr-per-la-rete-tim/ on Tue, 07 Feb 2023 12:59:49 +0000.