US investment fund KKR is considering the possibility of raising its opening bid to acquire 100 percent of the shares of Telecom Italia (TIM), according to sources cited by Bloomberg. KKR has offered EUR 0.505 per share, valuing the operator at EUR 10.8 billion, a figure thought to be too low to win over TIM’s leading shareholder Vivendi, which acquired its 24 percent stake at an average of EUR 1.03 per share, said the sources.
KKR’s non-binding offer represents a 46 percent premium on the closing price of TIM’s ordinary shares, with the total value of the offer rising to over EUR 33 billion including TIM’s debt pile. The US equity firm is at the early stages of deciding how high it would need to go to win over holders who are against the deal, said the report, adding that the offer remains conditional on the outcome of a four-week due diligence analysis as well as on the government’s backing.
In that regard, Reuters reported that industry minister Giancarlo Giorgetti confirmed that the government will discuss the proposed takeover when KKR makes a binding proposal. The bid to take the operator into private ownership can only proceed with the government’s approval as TIM is subject to “golden power” anti-takeover powers to protect companies considered of strategic importance.
