(AOF) – Telecom Italia Mobile (TIM) jumped more than 24% on the Milan stock exchange, to 0.43 euros per share on Monday, after the Italian operator announced that it had investigated KKR’s interest in buying the group on Sunday . The investment fund has thus sent a preliminary “friendly” cash offer of 0.505 euro per share for the entire capital of the company. The non-binding proposal would be conditional on a minimum acceptance level of 51% for the different categories of shares, and would have as its final objective a withdrawal of Telecom Italia from listing.
KKR’s offer shows a 41% premium over Friday’s price, says Invest Securities, as well as an enterprise value of 33 billion euros. The enterprise value multiples on estimated EBITDA are 5.2x for 2021 and 5x for 2022 and 2023.
“KKR would notably plan to merge TIM with OpenFiber, of which it acquired 37.5% of the capital last year for 2 billion euros, in order to benefit from the billions of euros of the European recovery plan”, affirms the ‘analyst.
“For now, visibility is limited,” says UBS, “but we note that KKR can benefit from its strong credentials and its 37.5% stake in FiberCop [con-entreprise détenue en majorité par Telecom Italia, ndlr] (KKR may have the option of redefining the TI-FiberCop sale-leaseback agreement, when the latter would be binding on any other potential bidders) “.
For his part, Jefferies believes that the “status quo may no longer be politically acceptable. There is a credible scenario, in our view, in which TIM may be unable to deliver on its current medium-term fiber investment plans,” writes the broker in a note. In addition, the group is indebted at 3.5x at the end of 2021 and domestic activity is in decline, with outlook revised downward in the second and third quarters.
Can KKR therefore succeed in a TI turnaround, wonders UBS? According to the Swiss bank, this would imply a long-term investment horizon and a capital allocation strategy aimed at financing strategic initiatives (FTTH, data centers, restructuring plan) and reducing leverage.
“At present there is no visibility on KKR’s plan, but we note that an experienced private capital provider such as KKR may be more apt to support TIM’s turnaround than shareholders. benchmarks that have controlled it over the past 20 years, thanks to its long-term investment horizon, its significant financial resources and the additional flexibility afforded by delisting “.
However, the game is not won for KKR, who will have to deal with Vivendi’s hostility. The French group, which owns 23.75% of the Italian operator, does not seem to sell its stake, reports the daily Les Echos. He also denies rumors that he is preparing a counter-offer with CVC or Advent funds. “We have been there for a long time and for a long time,” said a Vivendi spokesperson to the daily.
“Vivendi would rather seek the support of other shareholders to replace Luigi Gubitosi, managing director of TIM, whom he blames for the operational weakness of recent years”, speculates for its part Invest Securities.
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