(Tiper Stock Exchange) – The government enters the game of selling the TIM network to the American fund Kkr, effectively becoming a shareholder of the network with up to 20% of NetCo, the company made up of Sparkle’s primary network, secondary network (FiberCop) and submarine cables. However, the executive ensures a “decisive” role in defining strategic choices. By the end of the year the Tim’s Netco could, therefore, see the light: Kkr now has a weighty ally to close the operation and in a certain sense locks it down. Tim can thus implement the plan drawn up over a year ago and it seems unlikely that Vivendi will oppose it.
The memorandum of understanding signed yesterday provides for a binding offer – which Kkr must present to Tim’s board of directors by September 30 – which establishes, among other things, the entry of the MEF with a stake of up to 20% in Netco, Tim’s network company. The MEF will therefore be in the minority but the agreement provides that “the terms of the offer from the point of view of relations between the parties envisage a decisive role for the government in defining the strategic choices” of Netco, Tim’s network.
The next steps will be related toadoption of a Dpcm to complete the procedural process as far as the institutional intervention is concerned, meanwhile Kkr must complete the agreements for the financing of the da operation 23 billion euros and, according to rumors reported by Ansa, “the commitment of the banks should arrive by 30 August”.
For the government, the financial commitment should be up to 2 billion euros, considering that the “equity” part of the offer will be around 10 billion euros and the rest is debt that will end up in the newco. The fund will thus have a month to complete its binding offer and in October Tim’s board of directors will meet to evaluate it.”It is the ideal scenario for Tim, because it would eliminate the risks of an application of the golden power and could even lead to an improvement in the valuation of NetCo” commented the analysts. Meanwhile, the American fund is working on the definitive offer.
After the decision by Tim’s board of directors on June 22nd to start exclusive negotiations with Kkr, all the necessary activities are underway to arrive at the receipt of anfinal binding offer no later than 30 September. In New York, meanwhile, Kkr offers its investors the possibility of investing under the governance of the fund itself. It could therefore, as with Fibercop, choose the co-investment formula to bring on board other international investors interested in investing in Italy.