US investment firm KKR has made a EUR10.8 billion (USD12 billion) approach for Telecom Italia (TIM). The value of the buyout was a 45.7% premium on TIM’s ordinary share price on Friday, though Reuters reports that TIM’s largest shareholder, French media group Vivendi, sees the offer as being too low; Vivendi paid an average of EUR1.07 per share for its 24% stake.
The TIM board met for several hours on Sunday afternoon to discuss the offer, which it said was ‘non-binding and indicative’. The indication of interest was qualified by KKR as ‘friendly’, with the US firm aiming to obtain approval by TIM’s directors, management and the Italian government, which is an indirect TIM shareholder and also has special powers allowing it to block or place conditions on foreign takeovers. The TIM board has given no indication of whether or not it will support the offer.
KKR already partners TIM as a 37.5% shareholder in its fixed infrastructure business FiberCop, which controls last mile networks from the street cabinet to the customer premises.