The battle for the network Tim is increasingly intricate but already by March we will understand what the future of the largest Italian telephone company will be. Over the weekend came theoffering of the tandem Cdp-Macquarie, defined by many as "improving" compared to that of kkr, not so much for the total value of the operation – 18 billion including the debts taken over against the 20 billion of the Americans plus 7 for investments in new networks – but for the liquidity it would ensure for the Italian company. CDP's offer brings more money into the telephone company's coffers because it has a cash component of 10 billion, 8 billion of debt plus an earn-out of 2 billion payable upon the occurrence of certain conditions. However, it remains to be seen where it will get the necessary liquidity. But between the two litigants there are still some knots to untie: theAntitrust e Vivendi. Given that Cdp and Macquarie jointly control Open Fiber, Tim's main competitor in the network business, the operation will have to pass the scrutiny of the Brussels Antitrust. While Vincent Bolloré's French giant Vivendi would not be satisfied with both offers on Tim (of which it holds 24%), which would remain far from the valuation that the French shareholder had made on the network, equal to 31 billion euros.
The long-awaited offer from Palazzo Chigi, which has never made a secret of aiming for nationalization of the Tim network, will expire on March 31st. A new move by Kkr is expected by the same date, an "improvement" offer that meets the requests formulated by the board of the telco led by Pietro Labriola, according to which the proposal delivered at the end of January by the Americans "does not reflect the asset value”. The proposal for the safe from the Ministry of the Economy could already be evaluated in the next one board of directors of the 15 March “or on another date to be defined”, then the ball will pass to the assembly.
CDP aims for 51%, the hypothesis of a third shareholder is on the table
According to what Il Sole 24 Ore writes, to finalize the offer on the NetCo of Tim – which will involve the infrastructural network and the stakes in Sparkle (submarine cables) – there could be a guarantee from the Government. It remains to understand with what tools this will happen. In any case, the availability of capital does not seem to be a problem for Cassa (Telecom Italia shareholder with a 9,8% stake) and the Australian investor, as a second option is being studied: the entry of a third party partner. According to the architecture of the transaction, Cdp Equity should become the first shareholder with 51% of Tim's national network, while Macquarie could become the second shareholder with the remaining 49%, or a third shareholder could enter with a minority stake, trimmed from the share of the Australian investor (up to 30% writes the newspaper). In fact, in the last month there have been numerous discussions with some large international infrastructure funds: the Canadian Brookfield, the American Blackstone but also with another American, the Global Infrastructure Partners. And finally with some large sovereign wealth funds in the Persian Gulf. Furthermore, the banks of the consortium would also support the financing of the operation: on the side of the Cassa Credit Suisse e Bofa Merrill Lynch, while the Anglo-Asian giant has activated alongside Macquarie Hsbc.
The entry of a third partner is an increasingly less remote possibility, also in light of the lack of agreement between the "contenders" of Tim's national network: the consortium Cdp and Macquarie on one side and the US fund KKR on the other. Even if the possibility that an agreement between potential buyers could regain momentum cannot be ruled out.
The market likes the Cdp-Macquarie offer
However, the Cassa's offer was positively perceived by the market given that the title yesterday it closed up more than 3%, dominating the main index from the top of a rally that has been going on for weeks now. But that today, Tuesday 7 March, takes a breather (-0,75% at 0.32 euros per share), in contrast to the Milan stock exchange which, after a red start, turns into positive territory, recording minimal progress (just above parity).
