TIM and KKR lock horns over due diligence

A deal between KKR and TIM appears increasingly unlikely.

Anne Morris, Contributing Editor, Light Reading

April 5, 2022

3 Min Read
TIM and KKR lock horns over due diligence

The chances of KKR succeeding in its bid to buy Telecom Italia (TIM) and take it private appear to be rapidly receding. According to reports, the pair are at loggerheads over whether or not KKR should be allowed access to TIM's books before making a formal offer.

As Reuters indicates, the two companies appear to be in a catch-22 situation: TIM will not enable KKR to conduct due diligence before a firm offer is on the table, while the US investor is reportedly adamant that it needs to see the operator's books before it commits itself any further.

The situation appears to have reached a deadlock. According to Reuters, Banca Akros said in a note that "the odds of the deal seem now very low."

Figure 1: TIM's board is expected to discuss KKR's letter and the CVC proposal on April 7. (Source: M4OS Photos/Alamy Stock Photo) TIM's board is expected to discuss KKR's letter and the CVC proposal on April 7.
(Source: M4OS Photos/Alamy Stock Photo)

It could be that this is what TIM wanted all along. The operator's new management under CEO Pietro Labriola has not exactly welcomed KKR's bid with open arms. Indeed, TIM waited almost four months before even starting formal discussions on the investor's €10.8 billion (US$10.9 billion) offer.

The Italian group has now embarked on discussions with state lender CDP over a potential merger of TIM's fixed network assets with those of state-backed Open Fiber. It seems that the two hope to hammer out some sort of a deal by the end of April. Labriola has already outlined a plan to separate the Italian operator into two units by splitting infrastructure assets from services operations.

The decision to start talks with CDP has been seen as a further sign that Telecom Italia is pursuing an alternative path to a takeover by KKR. The investor, meanwhile, reportedly said it remains available to assess deals that would create value for TIM and all its shareholders.

Want to know more? Sign up to get our dedicated newsletters direct to
your inbox

Last week, TIM also received a non-binding proposal from UK-based CVC Capital Partners for a minority stake in the new enterprise services unit that would be created under Labriola's proposals.

Reuters has already reported that TIM's board is expected to discuss KKR's letter and the CVC proposal on April 7.

Related posts:

— Anne Morris, contributing editor, special to Light Reading

Read more about:


About the Author(s)

Anne Morris

Contributing Editor, Light Reading

Anne Morris is a freelance journalist, editor and translator. She has been working in the telecommunications sector since 1996, when she joined the London-based team of Communications Week International as copy editor. Over the years she held the editor position at Total Telecom Online and Total Tele-com Magazine, eventually leaving to go freelance in 2010. Now living in France, she writes for a number of titles and also provides research work for analyst companies.

Subscribe and receive the latest news from the industry.
Join 62,000+ members. Yes it's completely free.

You May Also Like