KKR ready to veto any Telecom Italia plan to carve out network – paper

FILE PHOTO: Trading information for KKR & Co is displayed on a screen on the floor of the NYSE in New York
FILE PHOTO: Trading information for KKR & Co is displayed on a screen on the floor of the New York Stock Exchange (NYSE) in New York, U.S., August 23, 2018. REUTERS/Brendan McDermid

February 19, 2022

MILAN (Reuters) – KKR could block any move by Telecom Italia (TIM) to carve out a network company by vetoing a transfer of last-mile landline unit FiberCop, La Stampa reported on Saturday.

The U.S. investment fund, which owns 37.5% of FiberCop, last year made a 10.8 billion euro ($12.2 billion) bid for Telecom Italia but has not yet received any official response and is growing impatient, the Italian daily said.

The fund does not intend to allow FiberCop to be folded into any network company, the newspaper said, citing financial sources.

KKR and TIM declined to comment.

The new management team at indebted TIM is working on a new plan that could envisage shunting the former phone monopolist’s network assets into a NetCo vehicle and splitting it off from its services businesses.

The overhaul would be an alternative to KKR’s takeover proposal and could pave the way for a merger of NetCo with smaller rival Open Fiber to create a national fast-fiber network champion, sources have said.

State lender Cassa Depositi e Prestiti (CDP), which owns around 10% of TIM, controls 60% of Open Fiber, with the rest in the hands of Australian investment fund Macquarie.

“This move would open new scenarios (but) would not be that surprising taking into account the reluctance of TIM to deal with the offer,” Italian broker Banca Akros said on Saturday.

($1 = 0.8833 euros)

(Reporting by Stephen Jewkes and Elvira Pollina; Editing by Mike Harrison)

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