Adds union statement
MILAN, January 4 (Reuters) – Telecom Italy (TIM) TLIT.MI is working with banks to draw up a new business plan that could involve divesting assets as it studies options to help assess a takeover bid from U.S. fund KKR KKR.Ntwo sources familiar with the matter said on Tuesday.
Indebted TIM received a non-binding takeover approach from KKR in November that indicatively valued the former telephone monopoly at 33 billion euros ($38 billion) including debt.
But a power vacuum sparked by the ousting of chief executive Luigi Gubitosi following a series of profit warnings last year has delayed the group’s response to KKR, which has requested access to the company’s data. company before making a formal offer.
KKR’s offer is conditional on support from the company’s board and the Italian government, but TIM’s largest shareholder, Vivendi VIV.PA said it did not reflect the value of TIM.
The new three-year plan, which will be developed on a stand-alone basis, will consider a series of options to increase value, such as spinning off assets, including its strategic network business, the sources said.
TIM, which has appointed Goldman Sachs and LionTree as advisers to assess KKR’s offer and other options, has brought in Italians Mediobanca and Vitali & Co to help with the plan, the sources added.
TIM’s landline network is the group’s most valuable asset and there have been calls from its No. 2 shareholder, state lender Cassa Depositi e Prestiti (CDP), to relaunch a stalled merger plan of the network with its fiber optic competitor Open Fiber to increase returns and avoid double investments.
CDP owns 60% of Open Fiber.
On KKR’s bid, CDP is working with Credit Suisse, the Italian Treasury with Lazard and Vivendi with Rothschild, the sources said.
TIM is expected to approve the guidelines for its new plan at a board meeting scheduled for January 26, one of the sources said.
Italian unions said on Tuesday that TIM chief executive Pietro Labriola had confirmed at a meeting that the group was working on a new plan, adding that maintaining employment levels would be at the heart of the government’s next steps. business.
Unions have called on management not to dismantle the company and to appoint a new CEO as soon as possible.
TIM has commissioned headhunter Spencer Stuart to find a new CEO and the process is expected to be finalized in January.
Labriola, the head of TIM’s Brazilian operations, is seen as a top contender, sources said.
(Reporting by Elvira Pollina and Stephen Jewkes Editing by Mark Potter)
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