Tim, what (not) has decided on the Kkr takeover bid
Green light from Tim's board of directors to define due diligence exclusively confirming the Kkr takeover bid. And the title takes off in Piazza Affari. Facts, numbers and insights
Tim will enter formal talks with Kkr to assess the potential € 10.8 billion offer from the US fund, nearly four months after the expression of interest .
In fact, Tim's board of directors has given a mandate to the chairman and CEO of the company "to initiate a formal dialogue with Kkr, further to those already undertaken informally in recent months by the consultants to obtain information to evaluate the attractiveness and concreteness of the potential offered from a financial and industrial point of view "and to define" a limited period and perimeter for carrying out an exclusively confirmatory due diligence ", reads a press release from Tim released yesterday evening.
In the expression of interest submitted by Kkr in mid-November , the due diligence request was four weeks.
And the market applauds. In Piazza Affari the shares of the telecommunications group lead the increases on the Ftse Mib, after reaching a maximum of + 9%, now they rise to 0.30 euro (data updated at 3 pm on March 14).
In the meeting, the note continues, the board also "confirmed its willingness to execute the Plan and to proceed with the exploration and development of the project in discontinuity, through the reorganization of the Group's activities and a possible integration with Open Fiber, negotiation with CDP and the necessary discussions with the Authorities ".
All the details.
FORMAL INTERVIEWS WITH KKR
Following informal contacts between consultants in recent months, Tim's CEO Pietro Labriola and President Salvatore Rossi will hold formal talks with Kkr to gather more details on the US fund's proposals.
THE MARKET REACTION
The news of the negotiation caused the Tim share to fly on the stock exchange at the opening of trading by 9.28%, at 0.32 euros.
KKR's offering of € 0.505 per share is a 75% premium over last Friday's closing level, compared to a 46% premium when it was first announced.
Telecom Italia shares reached an all-time low last week after the company reported a record loss in 2021 and Labriola unveiled its renewal plan.
THE OPEN FIBER DOSSIER
Labriola's plan also focuses on the separation of network assets from TIm's services branch.
The board of directors, which on 2 March also unanimously approved the new industrial plan, continues along this line. In fact, Tim has stated that he will continue negotiations with CDP and discussions with all the competent authorities on the Open Fiber merger, which would create a single broadband sample in Italy.
Supported by the opinions of the financial advisors, Mediobanca and Vitale, the board of directors "confirms the belief that there is an unspoken value in Tim that must be duly taken into consideration when evaluating any alternative option to the implementation of the Business Plan".
"A merger with Open Fiber could provide Tim investors with a 1 euro increase per share over the current configuration," some sources said earlier, Reuters recalled.
THE COMMENT OF THE ANALYSTS
According to the analysts of Banca Akros this is a "positive outcome, which increases the possibility (recently considered rather low) that Kkr's offer will be formalized". Experts note that "the preferred scenario for the board seems to remain an internal solution that includes the merger with Open Fiber".
On this front, according to press leaks today the Open Fiber board should approve a strategic agreement with Tim relating to the white areas. “It would be a step in the direction of greater integration between two companies”, comment the experts. "Certainly – confirm from Equita – it demonstrates a less conflictual relationship between the two companies, opening the way to forms of collaboration and possible integration (for which the main obstacle now appears to be of a regulatory nature)".
Bestinver underlines that “on the whole the news is positive as finally the board has declared that it will evaluate the offer proposed by Kkr and will start discussions with the American fund to get more information on the specific features of the offer. Now Kkr will have to say if the offer is still in place, considering the current scenario, and if it will be willing to accept the possible conditions that the board will establish on the period and perimeter of the confirmatory due diligence ” reports MF .
As Reuters points out, the Italian telecommunications company is subject to the special powers, the so-called Golden Power, of the government authority. And the executive has yet to take a formal position on Kkr's proposal.
Finally, it should be remembered that last year Kkr Infrastructure entered the capital of FiberCop, Tim's company born as a vehicle to build secondary fiber optic networks, with a 37.5% stake for a price of 1.8 billion euros. EUR.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/tim-che-cosa-non-ha-deciso-sullopa-di-kkr/ on Mon, 14 Mar 2022 13:28:03 +0000.