Telecom Italia will hold an emergency board meeting on Sunday to evaluate the takeover offer of the US private equity group KKR, which will be one of the largest telecommunications acquisitions in history.
According to three people with direct knowledge of the situation, KKR already holds a 37.5% stake in Telecom Italia’s “last mile” network, but has begun to provide a full offer to the entire company.
The acquisition of this 7.5 billion euro Italian group with a total debt of 29 billion euro is the latest sign of private equity investment in the European telecommunications industry. The fund is seeking to split its business and separate the Internet from the consumer business in order to realize value or improve the company’s performance.
Telecom Italia, this is a topic Hard fight Four years ago, the French investor Vivendi and the American rights activist fund Elliott Management Company have been struggling in recent quarters and issued two profit warnings in the past year.
The share price has fallen by one-third since March and two-thirds since 2018, putting pressure on Italian politician Luigi Gubitosi. Appointed as CEO in 2018, To reverse the situation of the company.
Corriere della Sera first reported the news of the bidding.
Vivendi denied that it was negotiating with KKR or CVC or any other agency on the possible privatization of Telecom Italia.
“Vivendi is a long-term shareholder, and we hope to cooperate with the government and other institutions to get Telecom Italia back on track,” the company said. “We are not satisfied with the performance… The important thing is to prevent the ship from sinking.”
Telecom Italia was the most valuable telecommunications company in Europe in the 1990s, but it has experienced crisis after crisis in the past 20 years. It is a company of important political significance, and the government has the “golden power” to prevent acquisitions or asset sales that are deemed to be inconsistent with the national interest.
KKR is one of the most active investors in the European telecommunications industry. It bought a minority stake in Telecom Italia’s secondary network for 1.8 billion euros through its infrastructure unit last year and is part of a private equity group consortium that privatized Spanish telecom operator MasMovil in a 5 billion euro transaction last year . It acquired Hyperoptic, a British all-fiber company, in 2019.
The US acquisition group had previously made an offer to Dutch telecommunications provider KPN, but this year it was rejected together with EQT and Stonepeak Infrastructure Partners’ separate approach. Any measure will become one of the largest private equity acquisition attempts in European history.
Additional reporting by Sarah White in Paris