Breaking News
Investing Pro 0

Exclusive - Tim's top investor Vivendi seeks 31 billion euro landline grid valuation - source

Stock Markets Jun 20, 2022 18:00
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
2/2 © Reuters. FILE PHOTO: The Tim logo is seen at its headquarters in Rome, Italy November 22, 2021. REUTERS/Yara Nardi 2/2
 
VIV
-4.76%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

By Elvira Pollina

MILAN (Reuters) - Telecom Italia (BIT:TLIT)'s (TIM) top investor Vivendi (EPA:VIV) wants the phone group to value its fixed landline network at 31 billion euros ($33 billion) in any sale, far above analysts' and TIM's own estimate, a source close to the French group said.

Vivendi's stance could potentially make it harder for TIM to reach a deal to sell its network, a possibility the former phone monopoly is currently exploring in discussions with its second biggest investor, state lender CDP.

Speaking anonymously because deliberations are private, the source said Vivendi believed a sale had to meet certain criteria in the interest of all of TIM's shareholders.

In particular, TIM's landline grid should carry at least 10 billion euros of the company's debt were it to be separated from the group's services arm, the person said.

Shares in TIM extended gains after the report and closed up 2.6% against a 1% rise in Italy's blue-chip index.

Vivendi owns 23.8% of TIM and its support is important for any asset separation deal to go through. TIM declined to comment.

SEPARATION

The comments come as TIM's new CEO Pietro Labriola works on a revamp plan for the debt-laden phone group centred on the separation of its wholesale fixed network operations from its services businesses.

Labriola will present his strategy to investors on July 7.

As part of the plan, TIM is considering an outright sale of its domestic landline grid and its international cable unit Sparkle, sources have previously said.

TIM is discussing the potential sale with state lender CDP after they signed a non-binding accord last month to create a unified broadband champion in Italy combining TIM's network assets with those of CDP-controlled rival Open Fiber.

CDP would control the combined network entity.

Discussions involve also infrastructure funds Macquarie and KKR which would also need to back a deal.

Macquarie is a minority investor in Open Fiber.

New York-based KKR, which last year offered to buy the whole of TIM for 33 billion euros including debt but was rejected, holds a stake in TIM's last-mile network.

Both funds would remain as minority investors in the TIM-Open Fiber single network operator.

After opposing for years the idea that TIM could lose control of its main infrastructure asset, Vivendi has opened the door to supporting Rome's efforts to create a single broadband operator under state oversight.

However, Vivendi CEO Arnaud de Puyfontaine has warned Vivendi would only back a sale of the network that valued it fairly, rejecting as inadequate analyst valuations for the grid of 17-21 billion euros before synergies.

The value is also far higher than a price tag for the business estimated by TIM of about 20 billion euros including debt.

The source close to Vivendi said the French media group was a long-term investor in TIM and, following a split, would focus its strategic efforts on the group's services arm which it ruled out selling.

($1 = 0.9511 euros)

Exclusive - Tim's top investor Vivendi seeks 31 billion euro landline grid valuation - source
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email