Telecom Italia Shares Jump After Decision to Engage with KKR

Shares in Telecom Italia (TIM) rose more than 9% on Monday after the phone group said it would start formal talks with KKR to assess more closely the U.S. fund’s potential 10.8 billion euro ($11.8 billion) offer.

At the end of a long board meeting on Sunday, TIM also said it would explore a possible tie-up with state-backed broadband rival Open Fiber as it presses on with in-house revamp its new Chief Exectuive Pietro Labriola presented in early March.

Banca Akros analyst Andrea Devita said it was a “positive outcome, increasing the odds (recently considered rather low) that the offer would be at the end finalised (assuming the attitude of KKR has not changed)”.

KKR declined to comment.

Shares in TIM have lost roughly 30% of their value year-to-date, hitting an all-time low, as expectations of KKR’ takeover proposal materialising gradually faded.

Labriola’s in-house revamp, which he unveiled together with a record loss for 2021, has failed to boost shares.

At 0843 shares were up 9.2% at 0.315 euros each, against a 1.4% rise in Italy’s blue-chip index

KKR is aiming to secure control of the debt-laden former phone monopoly, delist it and attempt to relaunch it by carving out its network infrastructure assets, sources have previously said.

ROME (Reuters)

Milan (Reuters)