Investment fund KKR launched an €11 billion bid to buyout Telecom Italia’s shares and take it private, the latest twist in the operator’s turbulent recent history following a period of poor performance under the current ownership.
Telecom Italia stated it received a non-binding and indicative offer to purchase 100 per cent of the company’s ordinary and savings shares, paid entirely in cash, equalling €0.505 a share, a 45 per cent premium on its closing price on Friday (19 November).
The offer gives the operator an equity value of €10.7 billion. It also counts €22.5 billion of net debt, giving the total takeover offer a value of more than €33 billion.
Telecom Italia said KKR’s offer qualified as “friendly” not hostile, and must be approved by its directors and management.
The deal is currently on a conditional four-week basis, during which due diligence will be conducted and also needs the go-ahead from Italy’s government, which retains power to veto any takeover.
At this stage, there is no indication whether the bid will be accepted.
After KKR’s offer was revealed, Financial Times reported rival investment companies CVC Capital Partners and Advent International are also open to discussing a potential buyout.
KKR already holds a 37.5 per cent stake in FiberCop, the unit holding Telecom Italia’s last mile network.
KKR’s takeover bid comes shortly after Telecom Italia’s current largest shareholder Vivendi called for a board meeting to discuss its strategy, following a period of poor financial performance.
Reports also emerged that Vivendi was lining up a replacement for CEO Luigi Gubitosi.
Telecom Italia was at the centre of a bitter boardroom battle after private equity investor Elliott Management built up a major stake and challenged Vivendi for control in 2018.Subscribe to our daily newsletter Back