The reasoning of financial analysts on the Kkr-Vivendi dispute over Tim’s control
It couldn’t be otherwise. With a 46% premium put on the table from the bottom Kkr and valuing the entire telephone company 10.8 billion, the Tim share flies to Piazza Affari at the end of the session, rising towards the price of theTakeover bid “friendly” of Americans of Kkr which enhances the title 50.5 cents. on the stock exchange at the end of the day, the stock closed the session taking off and scoring + 30.25% at € 0.4513.
Not only that but he recorded a volume records, with 1.5 billion pieces traded, more than 10 times the average of the last 90 days and more than 8% of capital changed hands. Savings securities also rose by over 30%. Salt to Paris stock exchange also the title Vivendi which becomes 3% after the competitor’s offer Kkr, a sign that the market reasons on the fact that the French will try to get a rise that allows the media company controlled by the family Bollorè to bring fresh cash on hand to also try to limit as much as possible the latent capital loss of vivendi’s investment in Tim.
Also in Piazza Affari, the Telecom movement is also heating up Inwit, the mobile phone tower company jointly controlled by Tim and Vodafone, which rose by 4.6%, an increase dictated by speculative reasoning on possible sales of the stake by theincumbent post takeover bid for Kkr reduce debt.
Waiting to know the response from Paris to Kkr’s offer on Tim in fact the stock market speculates. The price of the takeover bid (for now only in a non-binding and indicative expression of interest) implies a premium but the bottom “could be forced to go up”, some analysts commented.
Tim, the view of HSBC
“The offer is well above the average of recent deals which is 20%, but only 7% higher than the 2021 peak of the Tim share on the stock exchange – commented an analyst – Vivendi may push for more, seen the average price of 1 euro per share paid for its 24% stake “and aim for 83 cents per share. In the meantime, Hsbc has raised its judgment and recommends buying. Consob monitors but is expecting that the prices will rise today, going to align with the offer.
Tim, the view of Equita
For analysts of Equity, on the other hand, “the government’s declarations are currently in favor. The reaction of the political parties is instead in our opinion the key point to be evaluated, as well as that of the shareholders “.”Vivendi – the experts continued – holds today a de facto veto power on extraordinary transactions – observes the sim on the position of the first current shareholder of the tlc group – We think that may be tempted to accept the offer by negotiating the best possible exit. However so far he has commented that he is unlikely to support the offer. “
On the side of the public shareholder, on the other hand, if Cdp (9.8%) accepts Kkr’s offer, “would eliminate theimpasse strategic to have a position in both Tim and Open Fiber, remaining exposed only to Open Fiber and maintaining the opportunity to relaunch the single network project, especially if Kkr were in favor of a division of the network or were forced to give up control of the network for the Golden Power“. Equita is skeptical about the possibility that other investment funds could intervene on the Tim dossier:” We think that competitive offers are unlikely given the complexity of the situation, even if other funds are evaluating the dossier according to Bloomberg (CVC, Advent) and therefore are not to be excluded, also in light of the Government’s open position “.
Tim, the view of Jefferies
According to the experts of Jefferiesinstead, Kkr’s offer emphasizes the ambitions of the private equity group and the ability to find opportunities in the telecommunications sector. The government’s response is encouraging, continue the experts, who probably re-read the fears about Tim’s ability to develop the Plans in the field FTTP. THE potential obstacles are related to competition (Cdp’s influence on two fixed networks) and Vivendi (given the carrying price of 1.07 euros, written down to 0.83 euros).
Jefferies also reports that if we remove the FiberCop valuation and the current market values of Tim Brasil and Inwit from Tim’s EV, the residual assets are trading 5.9 times the operating Ev / Fcf ratio. The sector average, on the other hand, stands at € 14.3. In any case, the Critical factor for a re-rating of Tim is how much debt he might be loaded in case of any demerger of the fixed network.
Tim, the view of Intermonte
Intermonte evaluate Kkr’s offer “jumbo“, offer to be considered preliminary because it could also to increase both to capture additional potential factors upside (from the enhancement of the network and Noovle to M&A in Brazil) and to counter any counter offers.
The analysts of the Italian Sim, before the expression of interest of Kkr, already had a target of 50 cents (practically the same price proposed by the fund) and now raised to 55 cents. The analysts who sign the report, Giorgio Tavolini and Andrea Randone, highlight that the target threshold set by the Americans, that is, 51% of Tim, should reduce the risk of failure of the operation given that it would be within reach even in the event of a contrary position by Vivendi or Cdp, which could also remain shareholders.
But “the devil is in the details,” it points out in the report, and it is therefore likely that over the next four weeks the temperature of the political debate on Tim will rise. According to Intermonte, a private Tim would be the favorable scenario for a break up of the company – in two distinct companies focused on services and on the network – e it would accelerate the project of the single network.
Tim, the view of Bestinver
Finally, analysts from Bestinver therefore do not exclude a series of raises too in light of the fact that prices on the stock exchange weren’t even remotely reflecting the value of the company. A once the position of the Treasury with respect to the KKR proposal and the conditions for the operation is clear “it would not be strange to see competitive offers from other players, private equity or industrial“, the experts explained. Finally, for Bestinver it is unlikely that the Italian government will use the powers of Golden Share to block Kkr’s operation as the US fund is already Tim’s partner in the secondary network.
The conditions of the Kkr takeover bid on Tim
After the colossus AT&T in 2006, another American investor comes forward for Tim: is the bottom Kkr with a’Takeover bid. At the end of a long meeting lasting about four hours, a board of directors ad hoc of the telephone company, after the rumors circulated, has lifted the veil on terms of the offer launched by the institutional investor based on a New York that manages 430 billion dollars and with a passion for investments in digital and tech.
Kohlberg Kravis Roberts & co intends to get his hands on on 100% of the capital (ordinary and savings shares) ofex Sip to delist it and as a condition for the success of the operation it sets the achievement of the minimum membership threshold of 51% of the capital of both share categories.
The offer that was defined by Kkr, formerly a business partner with Tim as it owns 37.5% of FiberCop, the company to which the telephone group has contributed the last mile of the network, “friendly“puts on the table a value of € 0.505 per share entirely cash, evaluating the company as a whole about 11 billion, 57% more than the current value of the group.
The 46% premium offered to shareholders
In Piazza Affari, where the stock at the close on Friday was worth € 0.3465, Tim capitalizes on 5.176 billion euros. Lowest value that played a key role in convincing the US fund to move to the company. The € 0.505 offered constitutes a 46% shareholder bonus.
The operation is handled for Kkr from London by Alberto Signori, managing director responsible of business infrastructure for Europe, the Middle East and Africa and aspires to obtain the double approval both of board led by the CEO Luigi Gubitosi (manager who ended up in the crosshairs of criticisms for the management by 11 directors, the subject of concern also of the board of statutory auditors and that the first French shareholder – with 23.75% – Vivendi wants to discourage) he was born in management both of Government than for asset strategic national importance in the belly of Tim, such as the network and cables Telecom Sparkle, can exercise the Golden Power.
In addition to the double green disk of management and Palazzo Chigi, the stars and stripes fund also conditioned the offer to one due diligence four weeks on the accounts of the company in whose capital there is also the Cassa Depositi e Prestiti (and the president Giovanni Gorno Tempini in the Board of Directors) with a 9.81% share (in the financial statements at an average book value of approx 0.7 euros).
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