Telecom Italia takes off after KKR’s offer – archyworldys

MILAN (Reuters) – Telecom Italia shares soared by more than 20% Monday morning on the Milan Stock Exchange after the takeover proposal presented by the American fund KKR, which values ​​the Italian telecommunications operator at 10.8 billion d ‘euros.

At 10:21 am, the Telecom Italia share gained 22.34% to 0.4239 euro, its listing having been suspended for a time due to the extent of the increase.

Taking into account Telecom Italia’s net debt, which reached 22.5 billion euros, KKR’s offer gives the Italian group an enterprise value of just over 33 billion euros.

The American group specifies that the completion of the operation is conditional on the support of the Italian State and the result of the process of “due diligence” (an in-depth study of the financial situation) which would be spread over four weeks.

Telecom Italia said on Sunday that KKR had described as “friendly” its offer of 50.5 euro cents per share, which represented a premium of 47.5% over the closing price of the Telecom Italia share on Friday.

The price, which Telecom Italia deemed “indicative”, would imply a heavy capital loss for Vivendi, the largest shareholder of the Italian group with 24% of the capital, since the French spent an average of 1.07 euros per share for its investment in Telecom Italia.

Vivendi believes that KKR’s offer does not sufficiently value TIM, said a source close to the French media group.

On the Paris Bourse, Vivendi’s share climbed 2.4% to 11.315 euros, at the top of the CAC 40.

The Italian government also has a say in the matter, because of the weight of Telecom Italia in the deployment of broadband networks in the peninsula, one of the major components of the recovery plan co-financed by the European Union, but also possible social benefits, Telecom Italia employing 42,500 people in Italy.

The Treasury said on Sunday that a possible use of the veto power available to the state in the face of any attempt to take control of a company deemed strategic by foreign interests would depend on the implications of the operation for Italy’s telecommunications networks. .

For the time being, the board of directors of Telecom Italia has not indicated whether it would support KKR’s offer, which comes at a time when the managing director of TIM, Luigi Gubitosi, is jostled, in particular by Vivendi, to the result of two profit warnings in three months.

“The path to a formal offer may not be certain or quick, but we believe the offer is structured and credible and should trigger reactions from stakeholders,” analysts said. from HSBC in a note.

(Report by Valentina Za; Blandine Hénault for the French version, edited by Marc Angrand)