Management turmoil complicates Telecom Italia bid response -Breaking
Stephen Jewkes, Elvira Pollina and Pamela Baraglia
MILAN (Reuters). Telecom Italia (MI.) (TIM), as European banks vie for position in the largest private equity transaction, is looking to compile a list to help it advise on a U.S.-based group KKR takeover offer.
However, divisions in Italy’s largest phone company make it hard for the company respond to KKR’s non-binding offer valued at 33 Billion Euros ($37.40Billion) after debt is added.
Tensions remain high following a shareholder dispute that forced Luigi Gubitosi, the CEO of the company to resign. This was after a row with Vivendi (OTC) and other independent directors.
In last week’s drama, TIM placed oversight of the group’s strategic assets in the hands of Chairman Salvatore Rossi, setting up a special committee to study the KKR approach https://www.reuters.com/markets/deals/telecom-italia-board-meet-sunday-kkrs-takeover-proposal-sources-2021-11-21/#:~:text=KKR%20makes%20%2412%20billion%20approach%20to%20take%20Telecom%20Italia%20private%20%7C%20Reuters that was made public on Nov. 21.
However, the top management is still in uncertainty and there are key disagreements within the board.
Two sources close to the issue claim that Gubitosi, the Vivendi representative, and other board members have been pushing for a full board reshuffle since Gubitosi has refused to formally resign. It was this move which prevented Pier Labroid from being appointed CEO.
Sources said the “committee is meeting Friday to discuss advisors, but it’s unclear if that will succeed given the upheaval.”
Vivendi declined to comment.
KKR – Industry sources claim that KKR is working with Citi. Morgan Stanley JP Morgan – said that any deal was contingent upon support from both the Italian government (n:), and the TIM board.
“But at the moment there is not a management team at TIM, and no additional strategic plan. So how are you supposed to evaluate a bid if your strategy is not standalone? According to another person familiar with this matter,
Goldman Sachs, Intestacy Sandal Division IMP CIBC, and Bank of America (NYSE) were all considered to be able to advise TIM. Two other sources confirmed that this was the case, though they cautioned that it wasn’t certain.
Sources said that Rothschild (NYSE:), and Lazard are also vying for a role in TIM.
KKR’s four-week diligence will be required before a binding offer can be made. There has not been a special board meeting called prior to the scheduled regular meeting Dec.17. ($1 = 0.8823 euros)
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