“Destroying Telecom Italia's landline deal would widen losses for shareholders.” This is the title of an article published on Financial Times which explains how the Tim's fate “depends on the sale of his landline to the private equity group Kkr for a maximum of 22 billion euros". Only thanks to this agreement, the most important economic newspaper in the world, the company led by, continues Peter Labriola will be able to cut 14 billion euros.
Tim's deal with KKR “should be completed by August and will be difficult to stop. That doesn't mean that belligerent opponents will not try“, warns the Financial Times also recalling the lawsuit brought by Vivendi, Tim's first partner, against the sale of the network.
Among other things, “a shareholders' meeting to elect the new board of directors scheduled for the end of April would offer a quicker opportunity to interrupt” the sale process. “Short sellers are counting on it,” he adds.
Merlyn integrates plan: Tim Brasil and Tim Consumer on sale in 2024-25
Merlyn Partners presented a list for the renewal of Tim's board and integrated the communication on the TValue plan already announced previously: evaluate the deal on sale of Netco, sell Tim Brasil in 2024, sell Tim Consumer in 2025, create TechCo and establish new and more inclusive governance. These are the cornerstones indicated by Meryl who also designs six different scenarios: they all have in common the sale of Tim Brasil and Tim Consumer, while the sale of Netco is contemplated in 4 of the 6 hypotheses to be evaluated.
In the first scenario, for example, foreseeing the sale of Netco in the third quarter of 2024, the sale of Brazil in the fourth and of Consumer in the first quarter of 2025, it is expected to go from 20,3 billion in debt in 2023 to 6,6 billion in cash. In scenario 5, however, in which the sale of Netco is not contemplated, the basis is the sale of Tim Brasil in the fourth quarter of 2024 and of Consumer in the first quarter of 2025. By doing so, Tim would record a debt decreasing from 20,3, 8,2 to 2025 billion in XNUMX.
“We are in a crucial moment in Tim's story, a time when critical decisions are made about the business and the capital allocation made. We are very convinced - we read in the communication late on Thursday evening - of the strategic role that Tim plays in Italy and of the opportunity to create value" with "a plan that is not based exclusively on the sale of NetCo".
Then the thrust: the plan presented by the board of directors “not only lacks clarity and financial sustainability, but it can also lead to substantial risks“. Now, continues Merlyn, "it is up to us shareholders to express ourselves and decide what will be the right path to follow for our company".
The immediate sale of “Tim Brasil, as early as 2024, will generate “the liquidity cushion” to begin deleveraging and start investing in TechCo. Already "by the summer of 2024 we will start negotiations with potential buyers to accelerate the sale process of Tim Consumer and bring it to fruition in the shortest time possible and in any case no later than mid-2025". TechCo “will act as a market aggregator, taking on the role of predator rather than potential prey.”
The agreement on NetCor, Merlyn continues, “does not limit the TValue plan. Even without the NetCo perimeter, Tim remains the largest infrastructure player in Italy with a strong focus on the intelligent part of the network". The TValue plan is aimed at maximizing value for shareholders", involving the shareholders, "starting from the main ones, Vivendi and Cdp. The TValue plan welcomes all existing stakeholders including KKR and any others willing to contribute in the future.”
The ISS proxy confirms the voting recommendation for the board of directors list
In this situation the proxy advisor ISS confirmed the voting recommendation for the board of directors' list indicating Peter Labriola as CEO and Alberta Figari as president, in view of the renewal of Tim's board.
The new publication, explains Iss, takes place "to reflect the new information published by Bluebell Capital Partners". Yesterday "Bluebell published its plan for Tim" and, ISS specifies, "our voting recommendations remain unchanged". Bluebell, ISS recalls, announced only yesterday "Laurence Lafont as CEO candidate", awaiting the exit of the French manager, with a career in telecommunications and digital, from the Google group.
