US fund makes 'friendly' offer for Telecom Italia

[ROME] Telecom Italia (TIM) confirmed on Sunday it had received a "friendly", non-binding expression of interest by US private equity fund KKR that values the Italian operator at around 10.8 billion euros (S$14.7 billion).

An emergency meeting of TIM's board of directors was called to discuss "a possible public tender offer for the entire share capital of the company" offering an initial 0.505 euros a share, the firm said in a statement afterwards.

On Friday, TIM shares closed at around 0.35 euros.

It said the proposal, aimed at the "delisting" of the company, was subject to around four weeks of due diligence and would only go ahead with the backing of the holders of least 51 per cent of both ordinary and savings shares.

It would also require clearance by Italian government stakeholders, as TIM's network is considered a national strategic asset.

"The indication of interest was qualified by KKR as 'friendly' and aims at obtaining approval by TIM's directors and support by the company's management," the statement said.

KKR already has a 37.5 per cent stake in FiberCop, a joint venture with TIM and Italian internet provider Fastweb to provide fibre optic broadband across Italy.

The takeover proposal comes amid news reports that shareholders - the largest of which is France's Vivendi - are putting pressure on TIM's top management following disappointing recent results.

A spokesman for Vivendi had earlier denied it was in discussions with any funds, including CVC, which had also been named in speculation about TIM's future.

"Vivendi is a long-term investor in Telecom Italia and has been so since the beginning. Vivendi denies strongly having had any discussions with any funds, and more specifically with CVC," he said.

"Vivendi reiterates its desire and willingness to work alongside Italian authorities and public institutions for the long-term success of TIM."

AFP