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MILAN (Reuters) – Telecom Italia (MI:TLIT)’s (TIM) new boss said all shareholders stood to benefit from his standalone plan, setting it out as an alternative to a 10.8 billion euro ($12 billion) approach from U.S. fund KKR.
TIM CEO Pietro Labriola said the KKR approach was hedged with a whole series of uncertainties but appeared to be similar to his proposal to split the company into separate network and service businesses.
TIM shares tumbled 9% early on Thursday after the company plunged to a net loss of 8.7 billion euros ($9.7 billion) in 2021 after a 4.1 billion euro impairment of domestic goodwill and a 3.8 billion euro write off of a tax benefit.
Facing stiff competition in its home market, TIM also said it was not paying a dividend. The shares traded at 0.315 euros at 0830 GMT, well below the KKR proposal of 0.505 euros.
Leading TIM shareholder Vivendi (OTC:VIVHY) believes the KKR offer is too low and Labriola, former head of TIM’s Brazilian business, defended his strategy.
“Once KKR expresses interest at that price, you realise that the real value of the company is higher,” Labriola said.
He said his plan to split the network business from other activities such as consumer and its Brazilian operation would help to unlock value.
“If we do it internally the value generated can probably be redistributed among all shareholders, majority and minority,” Labriola told reporters.
TIM said it expected EBITDA to be stable over the 2022-24 period as a whole after a low-teens decrease in 2022, marking it out as another tough year for TIM.
The former phone monopoly said late on Wednesday that an assessment by its advisers on KKR’s approach would be finalised shortly and the board would then decide on it.
KKR is already involved in TIM after paying 1.8 billion euros last year for a 37.5% stake in its secondary network, known as FiberCop.
There has been speculation that KKR could ditch its approach and settle for a strengthened role in the new TIM network business but Labriola said there had been no talks on that with the U.S. fund.
TIM also said it planned to sell its indirect holding in Italian telecom towers group INWIT to investment group Ardian.($1 = 0.9009 euros)
