2023-11-06 06:20:00
White smoke for the takeover of the Telecom Italia fixed network by the American investment fund KKR. The board of directors of the Italian operator, which rendered its verdict after a series of marathon meetings, openly defies its main shareholder, Vivendi, opposed to this transaction. Eleven directors voted in favor of the transfer, the other three having expressed a negative opinion.
Telecom Italia will once again decide on a takeover offer from KKR for its private network
The CEO of the Italian group, Pietro Labriola, welcomed a “ggreat historic decision “. He assured to stay “ always open to dialogue » and to the proposals submitted, “ particularly by the largest shareholders. “Let’s get back to work » to implement this “ big historic decision by the board of directors today “, he said in a press release.
The shareholder Vivendi will “ challenge ” a ” illegal decision »
Vivendi, main shareholder of Telecom Italia (23.75%) immediately reacted, announcing its intention “ to use all legal means at his disposal » pour « challenge ” this decision ” illegal ” Who ” tramples » according to him the rights of Telecom Italia shareholders On several occasions, the group had said it was ready to take legal action if KKR’s offer was approved without being submitted to an extraordinary general meeting of shareholders. In such a meeting, decisions are taken by a two-thirds majority and Vivendi’s weight would be considerable. The French group slammed the door on the operator’s board of directors in January.
« The rights of Telecom Italia shareholders have been trampled on », Estimated Vivendi in a press release. “ The board of directors of Telecom Italia thus deprived each shareholder of the right to express their opinion at a meeting, as well as the associated right of withdrawal for shareholders in disagreement. Five legal opinions have confirmed that the transfer of the entire infrastructure network » of Telecom Italia would have “ necessity of a prior modification of the statutes of Telecom Italia, a decision relating only to the extraordinary general meeting of shareholders ».
Vivendi had increased the pressure on Telecom Italia by asking it, in vain, to examine, before any decision, an alternative plan presented by Stefano Siragusa, former deputy general director of the operator. To avoid selling the network, considered the “ crown jewel » of the group, the ex-boss, associated with the Merlyn investment fund, had proposed the sale of the lucrative Brazilian subsidiary and the branch in charge of individual clients in Italy. The offer values the network at 18.8 billion euros, excluding Sparkle, a subsidiary specializing in submarine cables, and the total amount of the transaction can reach 22 billion euros, under certain conditions. This proposal remains far from the expectations of Vivendi, which was banking on 31 billion euros.
A reduction in financial debt of around 14 billion euros after the transaction
KKR has committed to taking on around half of the operator’s approximately 40,000 employees in Italy, thus giving assurances to the government, keen to safeguard these jobs, according to a financial source. A first attempt to take control of the entirety of Telecom Italia failed in April 2022, encountering, again, the refusal of Vivendi who considered its offer too low.
The American fund has found a major ally, the Italian government, which intends to take a stake of up to 20% in the fixed network, to influence the choices of an infrastructure considered strategic. If the project comes to fruition, despite the legal battle that is coming, Telecom Italia will become the first major operator in Europe to take the plunge and separate itself from its fixed network in its market. The company needs new money to face a debt which continues to grow and now stands at 26.2 billion euros. The transaction should allow the group “ to reduce its financial debt by around 14 billion euros », Specified Telecom Italia in a press release.
Investing in optical fiber
This debt prevents it from investing in the deployment of optical fiber, while Italy is far behind in this area. According to the European Commission, fiber only covered 44% of households in Italy in 2022, compared to 63% in France and 89% in Spain. Hence the decision of the Italian government, which has special powers (“ golden power “) in sectors considered strategic, to increase its control over Telecom Italia. The Italian State is already its second shareholder, through the 9.81% share held by the Italian Caisse des Dépôts (CDP).
(With AFP)
1699253867
#illegal #decision #Vivendi