Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your experience. Save up to 40% More details

Management turmoil complicates Telecom Italia bid response

Stock MarketsDec 02, 2021 12:03PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
© Reuters. FILE PHOTO: The TIM logo is seen at its headquarters in Rome, Italy November 22, 2021. REUTERS/Yara Nardi/File Photo

By Elvira Pollina, Stephen Jewkes and Pamela Barbaglia

MILAN (Reuters) -Telecom Italia (TIM) is looking to draw up a list of candidates on Friday to advise it on a takeover approach from U.S. group KKR as banks jockey for position in Europe's biggest ever private equity deal.

But divisions within Italy's biggest phone group are making it difficult for the company to respond to KKR's non-binding bid approach valued at 33 billion euros ($37.40 billion) when debt is factored in.

Tensions are still running high after a shareholder row a week ago forced Luigi Gubitosi to step down as CEO following a clash with the group's top investor Vivendi (OTC:VIVHY) and independent board members.

In last week's drama, TIM placed oversight of the group's strategic assets in the hands of Chairman Salvatore Rossi, setting up a special committee to study the KKR approach that was made public on Nov. 21.

But top management remains in limbo and the board split on key issues.

Two people close to the matter said the Vivendi representatives and other board members are pushing for a full board reshuffle after Gubitosi refused to formally step down from the board - a move that prevented new general manager Pietro Labriola being named CEO last week.

"The committee is meeting on Friday to discuss advisers but it's not clear if they'll succeed given all the upheaval," one of the sources said.

Vivendi declined to comment.

KKR - which industry sources said was working with Citi, Morgan Stanley (NYSE:MS) and JP Morgan - has said any deal is conditional on support from the Italian government as well as the TIM board.

"But right now there is no management team at TIM and there is no more strategic plan ... how can you evaluate a bid if you have no standalone strategy plan?" another source familiar with the matter said.

Goldman Sachs (NYSE:GS), Intesa division IMI (LON:IMI) CIB and Bank of America (NYSE:BAC) had been lined up for a possible role in advising TIM before Gubitosi stepped aside, two other sources said, but they added that the situation was uncertain.

Rothschild and Lazard (NYSE:LAZ) are now also squaring off for a role with TIM, the sources said.

KKR's non-binding offer is also dependent on a four-week due diligence which will need a green light from TIM. No special board meeting has been called to date ahead of a scheduled regular meeting on Dec.17.

The Italian government, which is TIM's second-largest investor with a 10% stake, has special anti-takeover powers to shield companies deemed of strategic importance from foreign bids.

Addressing parliament on Thursday, Industry Minister Giancarlo Giorgetti said it was too early to say if the government would use any special powers in regard to KKR.

He said some of TIM's assets needed to be under public control.

Prime Minister Mario Draghi has already said Italy’s priorities in the matter are to safeguard jobs, technology and the network infrastructure at TIM.

($1 = 0.8823 euros)

Management turmoil complicates Telecom Italia bid response

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email