MILAN, Dec 6 (Reuters) - Telecom Italia (TIM) said
on Monday it has picked Goldman Sachs and LionTree to
advise Italy's biggest telcoms group on the takeover approach by
U.S. fund giant KKR.
KKR made its non-binding offer for TIM, just before a
boardroom row forced group CEO Luigi Gubitosi to step down
following a clash with top investor Vivendi after two
profit warnings since July.
A wide range of banks pitched for an advisory role in what
would be Europe's biggest ever private equity deal worth 33
billion euros ($37.3 billion) including debt.
TIM said in the statement the advisers would help the
company in also assessing any potential "strategic alternatives"
to develop the group.
KKR's offer is conditional on support from TIM and the
Italian government, as well as a four-week due diligence which
will need a green light from the company's board due to meet on
But the management upheaval and division within the group
has complicated decision-making, sources have said.
After losing its fourth chief executive in six years, TIM's
veteran executive Pietro Labriola was promoted as general
manager. However, a new CEO cannot be named until Gubitosi or
another director vacates a board seat.
KKR's approach received a cold response from Vivendi, which
faces a large capital loss on its 24% TIM stake at the 0.505
euros per share offered by the U.S. fund.
Reversing a long-standing stance, the French media giant
said it was open to handing control of TIM's fixed network to
the state as part of "an institutionally guided strategic
Over the weekend, the Italian press reported a meeting
between Vivendi and Treasury-owned investor CDP, TIM's
second-largest shareholder, over a possible alternative plan to
Two sources close to the matter told Reuters that Vivendi
was trying to build an alliance with CDP. Vivendi and CDP
declined to comment.
Trying to revive a project that stalled under Prime Minister
Mario Draghi, the Treasury is still studying a possible merger
between TIM's fixed network assets with those of CDP-backed
rival Open Fiber, a source said last month.
However, Draghi is not actively involved in talks at present
and there are contrasting views within the government over the
best course of action over TIM, political sources said on
KKR, which consulted Rome before making its offer and
already holds a 37.5% stake in TIM last-mile grid,, plans to
carve out the network and give CDP a leading role in overseeing
it, sources have said.
TIM's fixed line business provides Italy's main telecoms
infrastructure and plays a major role in broadband rollout
efforts on which Rome plans to spend billions of euros of
European Union funds to improve coverage.
Shares in TIM ended 1.4% down on Monday having dropped 4.4%
to 0.444 euros to trigger a trading suspension earlier in the
session amid uncertainty over KKR's offer.
($1 = 0.8854 euros)
(Reporting by Elvira Pollina, Giuseppe Fonte, Stephen Jewkes
Writing by Valentina Za
Editing by David Goodman and Alistair Bell)