KKR still interested in acquiring TIM, wants to discuss Open Fiber deal

  • US fund confirms interest in TIM, calls for lighter due diligence
  • KKR had positive exchanges with the Italian authorities
  • KKR says TIM network tie-up with Open Fiber was not in its plans
  • KKR ready to discuss Open Fiber suit

MILAN, March 24 (Reuters) – KKR (KKR.N) remains interested in taking over Telecom Italia (TIM) (TLIT.MI) and is also keen to discuss the telephone group’s plans to combine its fixed telephony assets with those of the ‘State. backed rival Open Fiber, two sources said Thursday.

KKR submitted a non-binding €10.8 billion ($11.9 billion) takeover proposal for TIM in November, having already invested €1.8 billion for a 37.5% stake in the group’s last mile landline network last year.

Italy’s biggest telecoms company let the New York-based fund wait nearly four months with no response before TIM’s board agreed earlier in March to enter into talks.

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TIM stock rose 12% on Thursday to trade at just under 0.34 euros, with KKR remaining in the game and other private equity firms to invest in parts of its business in as part of a business failure scenario.

However, the stock remains well below the price of 0.505 per share at which KKR’s proposal was launched.

In a letter responding to TIM’s questions about its offer, KKR stuck to a request to perform due diligence analysis before deciding whether to proceed, but narrowed the scope of the information sought, the sources added. .

KKR wrote that he had “positive exchanges” with Italian authorities over his proposal, the people said.


Although an Open Fiber merger is not part of KKR’s plans for TIM, the fund wants to discuss with the company the antitrust implications of such a deal and how it can create value for the business. FiberCop in which KKR is already an investor, the sources said.

Struggling with fierce competition in its home market, heavily indebted TIM was hit with multiple downgrades by major rating agencies this month after reporting a record annual loss and weak outlook.

In a bid to revamp the beleaguered operator, new chief executive Pietro Labriola has unveiled plans to separate TIM’s service operations from its national fixed network operations to unlock value.

TIM’s largest shareholder Vivendi (VIV.PA) called the KKR approach too weak and the French media group said there was “untapped value” in TIM.

A spin-off from TIM could help relaunch a long-running plan to merge TIM’s landline assets with those of Open Fiber, a move advocated by public lender CDP to avoid duplicating the heavy investment needed to upgrade. country network level.

According to TIM’s internal calculations, an Open Fiber merger could give TIM shares a €1 boost, people familiar with the matter said.

CDP holds a stake of nearly 10% in Telecom Italia and 60% in Open Fiber. ($1 = 0.9099 euros)

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Reporting by Elvira Pollina; written by Valentina Za Editing by Keith Weir

Our standards: The Thomson Reuters Trust Principles.

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