ROME/MILAN (Reuters) – Shares in Telecom Italia fell more than 6% on Wednesday as investors disappointed over the value placed by new offers on its Sparkle wireline and submarine cable business.
Analysts expressed concern that bids were well below what the group’s main shareholder, Vivendi, was aiming for the unit and that a quick fix to restructure the company is unlikely.
Telecom Italia said late Tuesday that it had received non-binding offers from KKR and Cassa Depositi e Prestiti (CDP), which is working with Macquarie.
Telecom Italia gave no further details, adding that its board of directors will assess the offers on May 4.
According to two sources close to the matter, CDP and Macquarie offered 19.3 billion euros for the assets. KKR’s proposal amounts to 21 billion euros, but 2 billion is conditional on meeting certain targets, another source commented.
Both proposals are around €1 billion higher than the initial offers made by both groups.
Intesa Sanpaolo cited that the proposals remain far from the 31 billion euros intended by Vivendi, which owns 24% of Telecom Italia, being its main shareholder.
“We expect another period of dialogue and the situation is still very fluid in terms of asset valuation, antitrust implications and government issues,” said Intesa Sanpaolo.
Telecom Italia wants to sell its biggest asset in a restructuring strategy spearheaded by Chief Executive Pietro Labriola, who previously led the Brazilian division of the TIM group. Telecom Italia has a “junk” credit rating and faces continued revenue decline in its home market.
Banca Akros said in a report that the improvements in offers were limited and that the “possibility of a simple sale is no longer so high and other options may arise”.
(By Elisa Anzolin, Alessandro Parodi and Giancarlo Navach)
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