Over the past 12 months, Gubitosi has unveiled KKR in a € 1.8 billion deal that transferred a 37.5% stake in FiberCop, the cutting edge community unit, to a New York-based fund. Last year, Gubitosi acquired KKR in a € 1.8 billion deal with a New York fund, 37.5% of FiberCop, which owns TIM’s last-mile network that connects locker roads to people’s homes.
Under KKR’s plan, TIM will set aside its fixed network for management as a government-regulated asset, in line with the model used by grid company PornoTerna (TRN.MI) or gas grid company Snam (SRG.MI). The finance ministry said that the government hopes that TIM’s network plans, backed by adequate investment, are in line to roll out broadband across Italy and protect employment rapidly.
Unable to stem the drain on TIM’s revenue, Gubitosi began looking for ways to get money out of TIM’s business. By renegotiating TIM’s fixed-line merger plan with fiber-optic rival OpenFiber. Gubitosi started to look for ways to squeeze money out of TIM’s resources by revising its plan to connect TIM’s fixed network – its most valuable asset – to its rival Open Fiber. This project, sponsored by the previous government, crashed under Prime Minister Mario Draghi.
Government prepares recover funds
Sources said the federal government, which is preparing to raise billions of euros in EU recovery funds to restore broadband in Italy, is aware of the need to find a solution to support the former telecommunications monopoly and protect its 42,500 home workers. The new owner is under scrutiny as he prepares to take on the group’s total debt of € 29 billion deficit. The government, which is preparing to raise billions of euros in European Union recovery funds to restore broadband in Italy, is aware of the need to find a way to strengthen the former telecommunications monopoly and protect its 42,500 domestic workers, the sources said.
Sources said that the New York-based private equity firm would cut TIM’s assets, including a landline used as a government-regulated asset on the Terna grid or Snam gas grid. KKR’s plan stipulates that TIM opens the fixed network and manages it as a government-regulated asset, following the model used by Terna or the gas company Snam. Private equity firms CVC Xhamster and Advent are exploring TIM’s potential plans and working with former TIM CEO Marco Patuano, senior advisor to Nomura in Italy. A spokesperson for the two foundations said he stood ready to work with all stakeholders on a solution to strengthen TIM, denying any contact with Vivendi.
To manage TIM’s fixed telephone and other strategic assets, the national investor CDP acquired 9.8% of the shares, becoming the group’s second-largest investor after Vivendi.
Vivendi faced significant capital losses due to its 24% stake in TIM, on which it spent € 1,071 per share. The new owner will also have to take on TIM’s total debt of € 29 billion. However, KKR wants to acquire TIM privately, which analysts say will ease the restructuring.
Working along for a solution
Rival private equity firms CVC and Advent, which also reviewed TIM’s plans recommended by its former CEO Marco Amaporn Patuano, said Sunday that they are open to working on a solution to bolster TIM.
Telecom Italia (TIM) has received a € 10.8 billion ($ 12 billion) method from the US-based KKR fund to recruit staff from Italy’s largest mobile phone group, the company said on Sunday. The move by KKR, prompted by TIM CEO Luigi Gubitosi, struggles to survive after being attacked by top investor Vivendi following two profit warnings in three months.
TIM said KKR had set a target price of € 0.505 for its potential bid, up 45.7% from Friday’s closing price of common shares. Up 45.7% from the closing price of its common shares on Friday. TIM said on Sunday that KKR called its offer of 50.5 cents per TIM share “friendly,” up 45.7% from the closing price of the group’s common shares on Friday.
TIM said KKR set an indicative price of its share buyback offer of € 0.505, representing a 45.7% premium over the odd-numbered stock close on Friday. KKR will also provide the same value for TIM’s financial savings stock. KKR will also offer the same price for TIM savings shares. TIM’s board of directors, chaired by former Bank of Italy official Salvatore Rossi, did not indicate whether he would support such an approach. However, KKR called his action “friendly” and aimed to help the company.
Is it a safe investment? Only time will tell
Vivendi, which is pushing to replace Gubitosi, believes the KKR proposal does not adequately assess TIM, said a person close to the French media group. Vivendi, who is returning Gubitosi, believes the KKR proposal does not sufficiently consider TIM. A Vivendi spokesman said that Vivendi faces significant capital losses due to its 24% stake in TIM. However, the entrepreneur remains committed to working with Italian authorities and institutions to achieve TIM’s long-term success. Vivendi, which is pushing to replace Gubitosi, believes the KKR proposal does not adequately assess TIM, said a person close to the French media group.
A person close to the French media group told Reuters Vivendi that KKR’s proposal does not adequately assess TIM, once the crown jewel of state assets before the ill-fated 1997 privatization. As a result, the company is facing a staggering capital loss. The bid price, which TIM has identified as “indicative,” will nevertheless expose Vivendi, the company’s primary investor, to a sharp loss of its 24% stake, on which it spent an average of € 1.07 per share.
The share price of Telecom Italia SpA rose on Monday after investment firm KKR & Co. expressed interest in acquiring a private telecommunications company through a tender offer worth approximately 10.79 billion euros (12.17 billion euros). KKR’s proposal depends on government support and a four-week due diligence analysis results, giving Telecom Italia (TIM) a net debt of 22.5 billion euros and an enterprise value of 33 billion euros. In the non-binding proposal, the cash value of the former telephone monopoly is 0.505 euros per share, a 45.7% premium to Friday’s closing price, and the deal, including debt, is more than 33 billion euros.
A friendly proposal
The Italian firm said last Sunday it had received a friendly, non-binding indication of interest from KKR. This event paves the way for a possible takeover bid at € 0.505 a share. TIM said on Sunday that KKR called its offer of 50.5 cents per TIM share “friendly,” up 45.7% from the closing price of the group’s common shares on Friday. TIM stated that the indication of interest provides an indicative price in full in cash of € 0.505 per ordinary or savings share.
The shares rose 32% in daytime trading to € 0.4585, a claim against an “indicative” bid price of € 0.505, with more than 8% of TIM’s capital changing hands.
A person close to the French media group told Reuters Vivendi that KKR’s proposal does not adequately assess TIM. KKR’s bid, which the New York-based fund described as “friendly” to TIM, would expose Vivendi Annunci69, the company’s primary investor, to a considerable loss of its 24% stake, which it spent an average of € 1.07 per share. In addition, KKR will split TIM’s fixed-line telephony business to operate as a government-regulated asset on the Terna electric grid or Snam gas grid, the sources said.
TIMs 42,500 employees in Italy have been a problem for the government, along with a pile of junk debt from the group that has discouraged investments needed to upgrade the network. KKR wants to acquire TIM privately, which analysts say will ease the restructuring. KKR already maintains ties with TIM and has been a member of FiberCop for a year. Once you have opened your account and transferred funds to it, you can search and select stocks to buy and sell.
A promising bet for the market
TIM said the terms include a “51% minimum membership level” for standard and savings shares. However, things are not as usual in global capital markets these days. We see similar trends also occurring in several critical areas of the venture capital market.
The price-to-earnings ratio (or price-to-earnings ratio) is one of the most commonly used valuation methods for stock market investors. However, private equity can also provide a more thoughtful approach to the industry’s exposure to key markets that may be undervalued or overvalued.
As for the relative price stability, which considers the general market trend, Telecom Italia SpA has changed by 23.49% over the past year. The market’s predictions disclose that there will be more Fall Angels in the traditional investment-grade market. Therefore, an essential factor contributing to the rise in stock prices is the dynamics of price increases.