Telecom Italia says no to KKR

Telecom Italia (TIM) has, as expected, rejected KKR’s call for it to open its books, effectively ruling out a bid from the investment outfit.

KKR had said it could not table a bid without due diligence in advance. In a letter to TIM, the company cited TIM’s profit warning in December and lower-than-expected annual results, guidance for 2022-24 that was below expectations and credit downgrades from ratings agencies for the telco, as reasons for its insistence on this.

In response, TIM said that KKR had received information relating to these points over the last few months “at the same time as other market participants” and rejected the call for due diligence.

“Given that KKR did not confirm its Expression of Interest, including the price therein previously indicated, the Board unanimously decided that it would not be appropriate at this time to grant KKR access to due diligence,” TIM said.

“Should KKR submit a deliverable, complete and attractive offer (including, amongst other things, a price per TIM ordinary / saving share), TIM Board of Directors would be open to reconsidering its decision in the interest of all shareholders.”

TIM’s board has meanwhile confirmed the appointment of Pietro Labriola as CEO with the powers previously granted to him on an interim basis.

Labriola is expected to move forwards with a plan to restructure TIM by separating its network operations from its services arm.

The telco revealed earlier this week that it has signed a non-disclosure agreement with CDP Equity S.p.A. to initiate preliminary discussions about the integration of TIM’s network with the network of Open Fiber, in which CDP Equity holds a 60% stake.

CDP is a shareholder in TIM as well as Open Fiber and the Italian government has been a strong proponent of creating a single infrastructure company for Italy.

TIM’s board has also been considering another bid by investment outfit CVC to take a minority stake in a new JV that would encompass TIM’s enterprise business.