Telecom Italia working on new business plan as assesses KKR offer – sources


MILAN (Reuters) – Telecom Italia (TIM) is working with banks to attract up a new business plan that might contain spinning off property as it research choices to assist assess a buyout offer from U.S. fund KKR, two sources aware of the matter stated on Tuesday.

Debt-laden TIM acquired a non-binding buyout strategy from KKR in November that indicatively valued the previous phone monopolist at 33 billion euros ($38 billion) together with debt.

But an influence vacuum prompted by the ousting of Chief Executive Luigi Gubitosi following a sequence of revenue warnings final yr has delayed the group’s response to KKR, which has requested entry to firm knowledge earlier than making a proper bid.

KKR’s offer is conditional on backing from the corporate’s board and Italy’s authorities, however TIM’s largest shareholder Vivendi has stated it doesn’t replicate TIM’s worth.

The new three-yr plan, which might be drawn up on a standalone foundation, will think about a sequence of choices to spice up worth such as spinning off property together with its strategic community business, the sources stated.

TIM, which has named Goldman Sachs and LionTree as advisers to evaluate the KKR offer and different choices, has introduced in Italy’s Mediobanca and Vitali & Co to assist out with the plan, the sources added.

TIM’s mounted line community is the group’s most prized asset and there have been calls from its No. 2 shareholder, state lender Cassa Depositi e Prestiti (CDP), to rekindle a stalled plan to merge the community with fibre optic rival Open Fiber to spice up returns and keep away from duplicating investments.

CDP owns 60% of Open Fiber.

On the KKR offer, CDP is working with Credit Suisse, Italy’s Treasury with Lazard and Vivendi with Rothschild, the sources stated.

TIM is predicted to approve the rules of its new plan at a board assembly scheduled for Jan. 26, one of many sources stated.

TIM, which nonetheless must discover a alternative for Gubitosi, has mandated head hunter Spencer Stuart to discover a new CEO and the method is predicted to be finalised in January.

Pietro Labriola, the top of TIM’s Brazilian business who was appointed common supervisor in November, is taken into account a number one candidate, sources have stated.

(Reporting by Elvira Pollina and Stephen Jewkes; Editing by Mark Potter)

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