US investment company KKR has said it will abandon a plan to buy Telecom Italia (TIM) if it is not granted the due diligence it has requested since it made its EUR10.8 billion (USD11.9 billion) offer in November. A report from Bloomberg said TIM’s share price fell as much 7.4% on Monday (4 April 2022), cutting its value to around EUR6.3 billion. KKR is expected to reiterate its interest in submitting a formal bid, but is making it clear that it needs to review the telco’s finances as soon as possible.
Meanwhile, TIM has confirmed that it has signed a non-disclosure agreement with state lender Cassa Depositi e Prestiti (CDP) as the pair begin preliminary discussions regarding a merger of TIM’s network business with wholesale operator Open Fiber, which is 60% owned by CDP. CDP also owns almost 10% of TIM’s shares. That deal would come as an alternative to the KKR takeover, though KKR would be invited to participate as a co-investor, Bloomberg says. KKR already owns 37.5% of TIM’s last-mile network unit FiberCop.
TIM says the purpose of the latest agreement with CDP is ‘to start negotiations with the goal of agreeing, indicatively by 30 April, on a memorandum of understanding to define the objectives, the perimeter, the structure and the main evaluation criteria and parameters related to the integration project’.