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TIM seeks improved KKR bid for network by end of March

Published 02/24/2023, 10:15 AM
Updated 02/24/2023, 01:13 PM
© Reuters. FILE PHOTO: Telecom Italia's logo is seen at the headquarters in Rozzano neighbourhood of Milan, Italy, May 25, 2016.    REUTERS/Stefano Rellandini

MILAN (Reuters) - Telecom Italia (BIT:TLIT) (TIM) said on Friday it would provide KKR with financial data that could help the U.S. fund improve its offer for TIM's network grid, as the current proposal "does not wholly reflect the value of the asset".

After a board meeting, TIM said its objective was to facilitate a better offer by the end of March for the 'NetCo' unit comprising its landline grid and its Sparkle submarine cable business.

TIM, which is aiming to restructure and cut its debt, said it welcomed KKR's interest but had concerns about the sustainability of the company that would emerge from a deal.

It said it would make some information available to KKR to help make its proposal more attractive.

A spokesman for the U.S. fund said it welcomed TIM's statement and was looking forward to working with its board "to cooperate within the framework of TIM's strategic objectives".

KKR's approach values the unit at some 20 billion euros, including debt and a 2 billion euro earn-out mechanism, sources have said.

(Graphic: Telecom Buzz - https://fingfx.thomsonreuters.com/gfx/mkt/mypmoagzkpr/TelecomItalia_KKR.jpeg)

The TIM board had not been expected to make a definitive decision after KKR this week extended its offer by four weeks at the behest of the Italian government, which is considering a potential deal with the U.S. fund.

Leading officials from the Treasury and Prime Minister Giorgia Meloni's office are open to exploring a deal that would involve KKR while giving Rome strategic control of the infrastructure, government sources have told Reuters.

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KKR has already invested 1.8 billion euros for a stake in TIM's last-mile grid. It has also made a takeover approach for the whole of the group, which TIM eventually rejected last year by refusing to grant it access to its books.

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