Tim, here’s how Kkr wants to undermine Vivendi (who wants to cripple Gubitosi)
All the details (and the oddities) of the expression of interest of the American fund Kkr for Tim. Facts, numbers, insights and rumors
The US fund Kkr presented an expression of interest for 100% of Tim's ordinary and savings shares, an offer intended for the delisting of the company.
The minimum threshold established by the US fund to complete the proposal, currently “non-binding and indicative”, is to reach a membership equal to at least 51% of the capital.
THE BOARD OF TIM ON KKR
The offer, subject to a 4-week due diligence, was evaluated by Tim's board of directors during an extraordinary meeting on Sunday 22 November which lasted approximately 4 hours.
WHAT THE KKR FUND SAYS ABOUT TIM
On Tim's board, Kkr qualified the intentions as "friendly" and subordinated "to the approval of the directors of the company and the support of the management", as well as "the approval of the relevant institutional subjects", given that the country's main telephone company is subject to to the special powers of the 'golden power' to protect the network, the most strategic and valuable asset of the telephone company (primarily the submarine cables through which the data and voice flows of the subsidiary Sparkle pass).
THE NUMBERS OF THE OFFER ON TIM
The offer of the US fund is equal to € 0.505 per share, 46% more than the € 0.3465 with which the Telecom stock closed last Friday's session. The fund would therefore value Tim about 11 billion euros.
A QUESTION OF PRICE
Carlotta Scozzari, a finance expert journalist at the Gedi group wrote: "Telecom Italia shares closed the stock market session on Friday at € 0.3465 and to find the hypothesized price for the takeover bid, it is necessary to go back to February 2020, before the pandemic. One could almost say that KKR is taking advantage of the Covid effect on Tim to pay a little less (than it would have paid before the pandemic) for the former monopoly telephone company, which owns Sparkle's copper network and submarine cables ".
THE KKR PROJECT ON THE NET
The fund aims to divide the company in two, writes the Financial Times , leaving control of the network to a subsidiary of the state, namely Cassa Depositi e Prestiti.
THE REPUBLIC ACCOUNTS
“With a separate valuation of the Network (NetCo) and commercial services (ServiceCo) it could reach 1 euro per share in value against the 0.32-33 expressed by Piazza Affari. If you buy everything for 0.5 euros (value indicated by Kkr in his letter), half by resorting to debt, in the end you would get 1, multiplying the value of the initial capital by three. A textbook operation ”, wrote the newspaper Repubblica .
THE ODDITIES OF THE AMERICAN FUND MOVE
Kkr's interest is, at least for now, a non-binding expression of interest, which, moreover, has the oddity of containing two clauses. The first is to offer four weeks to think about it: a rather unusual time frame for those who really want to launch a takeover bid. The second: the offer is bound by the fact that it must have the approval of the management. An indirectly clear indication: Gubitosi can remain at the top of the group. On the other hand, the head of the former Telecom Italia company has already negotiated with Kkr for the entry of the American fund into Fibercop , Tim's company which has the former Telecom secondary network and the fiber one developed by FlashFiber, the joint-venture of Tim (80 percent) and Fastweb (20 percent).
WHAT SAYS LIVE
Yesterday in the morning Vivendi, lately towards the delegated strategies and the very critical results, Luigi Gubitosi, had reiterated that he was "a long-term investor" from the initial entry into the group and had confirmed "the desire to work alongside the Italian authorities and public institutions for long-term success ”.
THE MOVES OF THE FRENCH
The French company had "firmly denied having had content with any fund and, more to say, with CVC", to put forward an alternative plan to oppose that of Kkr. The CVC itself, in tandem with the Advent fund, denied any contact with Vivendi. Vivendi actually aims to undermine the number one of the group, Luigi Gubitosi, accused of poor results and bad growth forecasts, as well as erroneous business assessments in the relationship with Dazn on football. On the other hand, Gubitosi was appointed when the American fund Elliot was in vogue on the board of Tim: the former manager Tim and Rai was chosen as a point of balance between the shareholders Vivendi and Cdp (who now seems to download Gubitosi, given that the president of Cdp , Giovanni Gorno Tempini, would have signed the letter of Tim's other directors promoted by Vivendi and the independent directors against Gubitosi).
THE GOVERNMENT COMMITTEE
The government is ready to launch a sort of supercommittee of ministries and super-experts to examine this possibility: among the hypothesized names, there would be those of the Minister of Economy Daniele Franco, of the Minister of Economic Development, Giancarlo Giorgetti, the Minister of Digital Innovation , Vittorio Colao, the undersecretary to the prime minister, Francesco Gabrielli, and the economists and government consultants Francesco Giavazzi, Roberto Garofoli and Giuseppe Chiné.
WHAT IS WHAT THE AMERICAN FUND KKR DOES
Kkr boasts over 400 billion dollars administered, a 'team' made up of nearly 1,700 employees and consultants, and over 550 analysts capable of piloting and advising investments from a network located in 20 cities of 16 different countries on 4 continents. Kkr has made investments in over 160 companies ranging from the infrastructure sectors to energy, from real estate to credit; and in Italy it is already a shareholder with 37.5% of FiberCop (the company – as mentioned – which has Tim's secondary network in its belly, that is, which connects road lockers to users' homes).
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/tim-ecco-come-kkr-vuole-scalzare-vivendi-che-vuole-azzoppare-gubitosi/ on Mon, 22 Nov 2021 06:30:05 +0000.