Benzinga | Nov 22, 2021 02:06PM EST

KKR Offers To Takeover Telecom Italia At 46% Premium

KKR & Co Inc (NYSE:KKR) has offered to acquire Telecom Italia SpA (OTC:TIIAY) for (euro)10.8 billion ($12 billion), including (euro)29 billion in gross debt, Reuters reports. The purchase price of (euro)0.505 implies a 45.7% premium to Telecom Italia's November 19 closing price.

* KKR aims to carve out Telecom Italia's fixed network to run as a government-regulated asset along the model used by energy grid company Terna Energy SA (OTC: TREAY) or gas grid firm Snam SpA (OTC: SNMRY).

* Italy's biggest phone group came under fire from top investor Vivendi SE (OTC: VIVEF) following two profit warnings in three months, charging CEO Luigi Gubitosi.

* Telecom Italia's revenue has shrunk by a fifth over the past five years, hit by aggressive competition from rivals like Iliad SA (OTC: ILIAY), Vodafone Group PLC (NASDAQ: VOD), Wind Tre, and Fastweb.

* Gubitosi is exploring options to squeeze money out of Telecom Italia's assets, particularly planning to merge its fixed-line grid with fiber optic rival Open Fiber.

* Telecom Italia observed that KKR had termed its action as "friendly" and aimed to win the company's backing and the government.

* Price Action: TIIAY shares traded higher by 3030.1010% at $5 in the market session on the last check Monday.