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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.
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.
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.
