Americana KKR makes offer to buy Telecom Italia | Companies

US private equity giant KKR has made a €10.8 billion ($12.2 billion) offer to buy Telecom Italia, owner of TIM Brasil – a move likely to meet opposition from its biggest shareholder, Vivendi.

KKR’s preliminary cash offer of 50.5 euro cents per share is “non-binding and indicative,” Telecom Italia’s board said in a statement after meeting to consider the approach. The value represents a 46% premium to the company’s closing stock price on Friday.

The private equity firm’s offer, characterized as friendly, could be just the beginning of a struggle to control Telecom Italia and the former Italian monopoly’s most precious asset: the wireline. Separately, two other private equity funds, Advent International Corp. and CVC Capital Partners said they are open to working with all interested parties to identify how to help Telecom Italia.

Telecom Italia shares have fallen about 50% over the past five years. The company had net debt of more than 22 billion euros at the end of September.

Telecom Italia’s Board of Directors informs that it has received the offer and states that it would be subject to a minimum acceptance level of 51% of the shares.

“The Indication of Interest was qualified by KKR as ‘friendly’ and aims to obtain the approval of TIM’s directors and the support of the company’s management. For now, it is conditioned – among others – to a four-week confirmation due diligence as well as the release by key government stakeholders (Telecom Italia is subject to special government powers, called Golden Power),” reads the Italian company’s statement.

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