The offer is the latest development in a long-running saga surrounding the sale of TIM’s fixed network assets
In a press release published today, TIM has announced that KKR has submitted a binding offer for the operator’s TIM’s fixed-line business, which will be spun into a new entity named NetCo.
KKR has also submitted an additional non-binding offer for the Italian incumbent’s subsea cable subsidiary, Sparkle. The final bid for Sparkle is expected be presented “within four to eight weeks”.
KKR and TIM entered into negotiations in June this year. Since then, the Italian government has agreed to take a 20% stake in the business alongside KKR.
Exact figures of the offer have not been released, although according to Reuters, TIM’s fixed access network and Sparkle together are worth over €23 billion, although this has not been confirmed by either KKR or TIM.
The offer for TIM’s domestic fixed access grid is valid until 8th November, with the possibility of an extension until 20th December.
If successful, the bid would be momentous for TIM, helping to significantly reduce the company’s €26 billion of debt.
However, there has been significant controversy around the bid, with TIM’s top investor Vivendi, who hold a 23.75% stake in the firm, reported to be displeased with the bid. Vivendi argues that TIM’s assets are worth around €30 billion and are therefore being undervalued by KKR.
Vivendi have not yet commented on the developments, although it is rumoured that the firm has held meetings with Italian government officials in recent weeks to discuss the transactional details.
Since the news, TIM’s share price has dropped by 4%, which is rumoured to be due to the lack of clarity around the transaction’s latest developments.
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