The outspoken shareholder thinks KKR’s bid for TIM’s fixed line network undervalues the assets by around €7 billion

Earlier this week, KKR finally made a binding offer for a stake in TIM’s would-be NetCo, which includes the company’s fixed-network.

The financial details of the offer were not disclosed to the public, but reports suggest that it values the various assets at around $23 billion.

But while this offer could be the solution to TIM’s debt-laden woes, the company’s largest shareholder, Vivendi, is far from enthusiastic. Ever since the plan to spin off the company’s network assets was first devised by CEO Pietro Labriola, Vivendi has appeared dissatisfied, saying TIM’s assets should be valued closer to €30 billion.

Yesterday, speaking to analysts following a company earnings call, Vivendi reiterated this point, with CFO Francois Laroze saying that the company wants “to express our position officially” via a shareholders meeting or an extraordinary meeting.

It is worth noting here that, until recently, it was assumed that a stake in TIM’s submarine cable unit, Sparkle, was also being sold under the NetCo umbrella. However, this latest bid from KKR includes a separate offer for the subsea unit, potentially opening the door to selling the various assets separately. Indeed, this could even lead TIM to begin a separate auction process for the subsea unit.

The government has long considered both TIM’s submarine cable assets to be critical national infrastructure and so would surely be heavily interested in building a stake in the business. If so, it would likely do so though its investment bank Cassa Depositi e Prestiti (CDP), with which it had previously made bids for TIM’s network in partnership with Macquarie.

Regardless of how the deal is being formulated, Vivendi seems intent on remaining a thorn in KKR’s side. Nonetheless, the company said it would “contemplate all options” for its holdings, so there may yet be light – however dim – at the end of this tunnel.

KKR’s bid is reportedly valid until November 8, with the possibility of being extended to December 20.

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