Four months later: Telecom Italia starts talks with KKR following £9bn bid
Four months after the first approach, Italy’s biggest phone firm Telecom Italia has said it will finally start formal talks with US fund KKR to assess its €10.8bn (£9bn) swoop.
Telecom Italia revealed it would examine “the attractiveness and deliverability” of KKR’s proposal, as well as define the “length and scope” of confirmatory due diligence before formalising the non-binding bid.
The update sent shares up nearly five per cent this afternoon.
The telecoms giant also added that it would continue to explore its tie-up bid with rival Open Fiber, as reported by Reuters.
An agreement, which is still under discussion, would allow Open Fiber to use TIM infrastructure in the hard-to-reach areas in return for a fee, as well as give Open Fiber access to their clients.
It comes as the new TIM chief exec Pietro Labriola looks to develop a three-year business plan for the heavily indebted group, which reportedly hinges on a separation of the group’s infrastructure assets from its services operations.
Meanwhile, two of Europe’s biggest telecom firms Orange and Masmovil entered into exclusive talks to combine their businesses in Spain last week.
The new entity would take the form of a 50-50 joint venture with a combined enterprise value of €19.6bn, the two companies said in a statement.
The combined power of France’s Orange and Spain’s Masmovil is likely to face heavy European competition hurdles: a merger of the two would bring together the second and fourth largest players in the continent.
Crucially, it also throws the future of British firm Vodafone into question after its share price has already taken a battering in recent weeks.