Italian Government’s new offer to purchase 100% of Sparkle allows TIM to choose a “different option”
Telecom Italia (TIM) said it has received an offer from the Ministry of Economy and Finance (MEF) to acquire its international infrastructure arm Sparkle. The offer, issued in a statement comes with the caveat referring to the possibility of negotiating a different option, with possible adjustments to the contractual terms, in the event TIM retains a minority stake for a certain period and: “supports the implementation of the strategic plan”. MEF’s offer will be effective for 15 days and will now be scrutinised by TIM’s board of directors – scheduled for 7 February.
The deadline for KKR’s new offer on Sparkle expired on 31 January. TIM’s media statement appeared in response to a Reuters story suggesting Italy’s Treasury and KKR had agreed the terms of the bid to be presented by KKR for Sparkle, citing three sources familiar with the matter. One of the sources, who comes from the Treasury, said the ministry “is ready” as it has finalised all the preparatory work for the bid, which requires the Italian Government’s backing.
Separate sources have previously said that KKR was working to submit a bid between €700m ($758.38 million) and €800m ($866.72 million) after TIM billed a €600m offer as too low. The Treasury will be able to take full ownership of Sparkle from KKR “at a later stage”, under a decree adopted last year by Meloni’s government.
The 7 February board meeting will be pivotal for TIM with CorCom reporting CEO Pietro Labriola (above) is pushing for a female chair to replace outgoing chair Salvatore Rossi, with media speculation pointing to Patrizia Grieco, former chair of Enel and current chair of Assonime and Anima, and Claudia Parzani , chair of Borsa Italiana. The board will also be discussing replacement for up to six directors with several terms expiring in April. Following the Netco sale the directors may even decide to reduce their total to nine from 15.
Meanwhile, Vivendi has asked the European Union’s anti-trust authority to investigate TIM’s sale of NetCo. Vivendi, which owns a stake of just under 24% and 17% of the voting rights stake in TIM, has fiercely opposed the plan to sell NetCo KKR for up to €22 billion.
CorCom said the approval of TIM’s preliminary 2023 results is scheduled for 14 February, which will then be definitively approved in March. “We expect a very encouraging closing, with the exceeding of the annual objectives for the second year in a row, confirming the quality and effectiveness of the current management’s strategy,” Intemonte analysts told the journal. They estimate a Group topline for the fourth quarter to €4.34bn up by 1.8% and an adjusted EBITDA at €1.59bn up by 6%, net debt after leases down to €20.3bn from €21.8bn at the end of September.