KKR Offers To Takeover Telecom Italia At 46% Premium

Author: Anusuya Lahiri | November 22, 2021 03:01pm

KKR & Co Inc (NYSE:KKR) has offered to acquire Telecom Italia SpA (OTC:TIIAY) for €10.8 billion ($12 billion), including €29 billion in gross debt, Reuters reports. The purchase price of €0.505 implies a 45.7% premium to Telecom Italia's November 19 closing price.

KKR aims to carve out Telecom Italia's fixed network to run as a government-regulated asset along the model used by energy grid company Terna Energy SA (OTC: TREAY) or gas grid firm Snam SpA (OTC: SNMRY).
Italy's biggest phone group came under fire from top investor Vivendi SE (OTC: VIVEF) following two profit warnings in three months, charging CEO Luigi Gubitosi.
Telecom Italia's revenue has shrunk by a fifth over the past five years, hit by aggressive competition from rivals like Iliad SA (OTC: ILIAY), Vodafone Group PLC (NASDAQ: VOD), Wind Tre, and Fastweb.
Gubitosi is exploring options to squeeze money out of Telecom Italia's assets, particularly planning to merge its fixed-line grid with fiber optic rival Open Fiber.
Telecom Italia observed that KKR had termed its action as "friendly" and aimed to win the company's backing and the government.
Price Action: TIIAY shares traded higher by 3030.1010% at $5 in the market session on the last check Monday.