Tim, what happens after the offers from Cdp and Kkr
Cdp-Macquarie and Kkr filed the offers for improvements requested by the Tim group for Netco, the Telecom Italia network company which brings together the primary infrastructure, the secondary infrastructure of Fibercop (of which Kkr owns 37.5%) and the submarine cables of Sparkle. Facts, numbers, rumors and scenarios
There is one aspect of the two offers (Cdp-Maquarie and Kkr) which makes the government incline to prefer the first: Tim's strategic subsidiary Sparkle, in the offer of Cassa depositi e prestiti, will be 100% owned by Cdp (which is controlled by the Ministry of Economy).
This is the indiscretion collected in ministerial circles after the new offers received by Tim on Netco.
In the meantime, the two offers have not sparked the interest of investors on the stock exchange.
In fact, Tim accentuates the declines in Piazza Affari, with the stock of the former monopolist selling 7.5% at 0.29 euros.
Some analysts, such as Bestinver and Akros, highlight the modest extent of the adjustments made by KKR and Cdp-Macquarie to their offers for the network. Akros speaks of "limited but reasonable" improvements that "certainly won't please Vivendi" but which Tim's board of directors may also "not be enthusiastic about".
"The likelihood of a direct sale of the network is not so high and other options could emerge," say the analysts, who nonetheless attribute Tim's shares, on the basis of the sum of the company's parts, a value of 40 cents already in existence of a network valuation of 17 billion, lower than those arrived from Kkr and Cdp.
But let's see what happened yesterday.
OFFERS ON THE TIM NETWORK
Yesterday, Cdp-Macquarie and Kkr filed the improved offers requested by the telephone group. The US fund would have put 1 billion more on the table than the original 20 billion proposal, while that of the CDP-Macquarie consortium would have gone from 18 to 19.3 billion.
THE INCREASE OF OFFERS
The offers for Netco, the Telecom Italia network company which brings together the primary infrastructure, the secondary infrastructure of Fibercop (of which Kkr has 37.5%) and the submarine cables of Sparkle therefore increased in value.
KKR'S OFFER
Kkr has increased its offer by 1 billion to 21 billion from the 20 initially offered: 8 billion is the debt that would be deconsolidated by Tim, 11 billion is the cash portion and 2 billion is represented by the earn out in the event of the creation of the network unique with Open Fiber.
THE OFFER FROM CDP AND MAQUARIE
In the new offer, CDP is indicated as the sole purchaser of 100% of Sparkle's international cables, valued at 700 million plus an earn-out of 200 million, which would still remain within the perimeter of the network (NetCo) that Cassa would control with Macquarie. The proposal by Cdp and Mquarie provides for the integration with Open Fiber (the confrontation with the EU Antitrust will start shortly) and indicates 60 days for the binding offer.
THE SPARKLE FILE
The aspect concerning Sparkle, according to the government indiscretions collected by Start Magazine , will be one of the decisive aspects for Palazzo Chigi given the high strategic nature of the subsidiary of the Tim group which owns the submarine cables ( an important and delicate asset also for the Secret Service having regard to intercontinental communications).
TIMES
Tim's board will meet on May 4 to examine the proposals and evaluate how to proceed. The values are lower than those indicated by Vivendi, even if the articulation of the new offers could make a negotiation more feasible, wrote the Corriere della sera .
THE CUDDLES OF REPUBLIC
The newspaper Repubblica pampers the offer of the American fund: "Kkr's offer has the advantage of being immediately executable, given that it is not subject to scrutiny by the EU but only to four weeks of due diligence".
THE POINT OF THE SUN 24 HOURS
The study phase of the offers and comparison now begins, on which, however, the assessment already substantially expressed by the first shareholder Vivendi, for which 31 billion euros should have represented the floor for any discussion, cannot fail to weigh, underlined Il Sole 24 hours : "The fact that Tim's week will be punctuated by another key appointment is a significant variable: tomorrow's shareholders' meeting in which, among other points, the remuneration policy will also be examined, with salaries and bonuses for the management, including the CEO Pietro Labriola (in the photo, ed ), on which Vivendi has publicly expressed his criticisms and announced his vote against”.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/tim-cdp-kkr-sparkle/ on Wed, 19 Apr 2023 06:58:56 +0000.