Published On : 04/19/2023

TIM shares slide as reported grid bids disappoint

ROME/MILAN (Reuters) – Shares in Telecom Italia (TIM) tumbled more than 5% on Wednesday on disappointment at the reported valuation of new offers for its landline grid and submarine cable unit Sparkle.

Analysts voiced concern that the bids fell well short of what leading TIM shareholder Vivendi is seeking and that a swift resolution of the latest effort to reshape the former phone monopoly appeared unlikely.

TIM said late on Tuesday it had received new non-binding bids from both KKR and rival Cassa Depositi e Prestiti (CDP), which is working with Macquarie.

TIM gave no further details, adding its board would review the bids on May 4.

According to two sources close to the matter, Italian state lender CDP and partner Macquarie offered 19.3 billion euros ($21.2 billion) for the assets.

KKR’s bid amounts to 21 billion euros, including 2 billion euros if certain goals are met, another source close to the matter said.

Both bids were around 1 billion euros higher than the reported initial offers from the rival camps.

Intesa Sanpaolo noted that the bids remained far from the 31 billion euro figure sought by Vivendi, which is TIM’s top shareholder with 24% of the company.

We expect another interlocutory period with a situation still very fluid in terms of valuation of the asset, antitrust implications and governance issues,” Intesa Sanpaolo said.

TIM wants to sell its largest asset as CEO Pietro Labriola seeks to restructure the group, which has a “junk” debt rating and faces a steady revenue decline in its competitive home market.

Banca Akros said in a note the reported improvements on previous bids were limited, adding “the likelihood of a straight sale is not that high and other options could emerge.”

TIM shares were down 4.3% at 0810 GMT, having lost as much as 5.7% earlier in the session.

($1 = 0.9114 euro)

(Reporting by Elisa Anzolin, Alessandro Parodi and Giancarlo Navach; Writing by Alvise Armellini and Keith Weir; Editing by Jonathan Oatis and Mark Potter)

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