Tim has received the binding offer from fAmerican world KKR (Kohlberg Kravis Roberts & Co. LP) to purchase NetCo, which comprises TIM's fixed-line assets, including FiberCop.
The American fund also presented anon-binding offer is preferably used for Tim's participation in Sparkle, with the intention of presenting a binding offer within 4/8 weeks, after the due diligence phase, requesting a period of exclusivity until next December 20th. Tim itself communicated this, specifying that “the offer for NetCo will expire November 8th, but it's possible discuss further extensions until December 20th. The Board of Directors will review the binding offer as soon as the analysis is completed."
The figures of the offer
THEmain offer is led by the KKR fund in collaboration with the Mef. KKR is ready to acquire 65% and signed an agreement with the mef so that this you buy a 15-20% share once the operation receives approval from the Court of Auditors, the TIM Board of Directors and, possibly, also from the assembly. The same goes for the F2i fund, managed by Renato Ravanelli, who is gathering investors for a fund dedicated to the Tim network, with an option to acquire between 10 and 15%.
The agreements between the three future partners provide for annual investments of 1,5-2 billion euros, operational management by KKR and the presidency entrusted to Italian figures.
The valuation for the acquisition of 100% of Netco – according to press rumors gathered so far – was initially set at 21 billion, but it can reach 23 billion if we include the synergies resulting from a possible merger with Open Fiber. Recently, there has been an attempt to increase this valuation to around 24 billion, according to a "fairness opinion" requested by Tim's board of directors from one of its consultants (presumably Goldman Sachs) which indicated a valuation range of between 24 and 26 billion . However, it is unlikely that this amount will be reached after the Ministry of Economy (Mef) has allocated 2,5 billion in exchange for 20% and the operation has already been defined with the financiers.
Proposal now under consideration, the Vivendi stumbling block remains
The offer to purchase Tim is complex and includes approximately 500 pages of attached documents. Some of the points that can be improved include the fate of part of the 40.000 employees of Tim, and how many will be in the service company after the spin-off.
KKR's offer will be now subject to analysis by advisors before being submitted to Tim's Board of Directors. The latter will consider the American relaunch during a meeting scheduled between the end of October and the first days of November. The opposition to the operation remains to be resolved Vivendi (first shareholder with 23,7% of the capital) but it seems likely that the decision can be resolved with an ordinary shareholders' meeting. Peter Labriola, has already obtained two legal opinions that suggest board approval is sufficient to complete the deal. In this way, in an ordinary meeting, Vivendi would not be able to exercise the decisive influence that it would have in an extraordinary meeting that requires qualified majorities.
