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Bid target Telecom Italia’s auditors meet before key board meeting -sources -Breaking


© Reuters. FILE PHOTO – The Tim logo can be seen in its Rome headquarters on November 22nd, 2021. REUTERS/Yara Nardi/File Photo

MILAN (Reuters) – Telecom Italia Sources told Reuters that (MI:) will be examined by its auditors and risk committee on Thursday, ahead of a meeting of the board which may decide Italy’s largest phone company and its future chief executive.

Italy’s telecoms monopoly was bought out by KKR, a U.S. equity firm. This comes amid a boardroom dispute between Luigi Gubitosi, CEO of TIM and Vivendi, TIM’s largest investor (OTC:).

After receiving two profit warnings from TIM since July, Vivendi wants to make changes. Partly due to a DAZN-expensive deal that allowed TIM to stream top matches of Italian soccer, this failed to increase TIM’s revenue.

Italian newspapers report that auditors will be reviewing TIM’s earnings to determine whether a third profit warning might be required as a consequence of the DAZN rights contract.

A third downgrade in TIM’s outlook could further help Vivendi to seek a CEO change.

Gubitosi maintains close ties to KKR. KKR purchased a 37.5% stake last year in Telecom Italia’s final-mile grid. Gubitosi wants to protect its investment.

Any management reshuffle might make it difficult for KKR’s plans to pursue the offer. It is dependent on government approval and board support.

Rome is TIM’s second-largest investor via state-lender CDP. It has anti-takeover power to protect strategic companies from foreign bids. According to sources, CDP has so far opposed major managerial changes at TIM.

TIM shares fell 5% to 0.4723 euro at 1335 GMT.

($1 = 0.8913 euros)

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Mike Robinson
Mike covers the financial, utilities and biotechnology sectors for Street Register. He has been writing about investment and personal finance topics for almost 12 years. Mike has an MBA in Finance from Wake Forest University.