Nov 22, 2021 - Economy

KKR makes buyout offer to Telecom Italia for €33.2 billion

KKR logo. Photo Illustration by Pavlo Gonchar/SOPA Images/LightRocket via Getty Images

KKR offered to take Telecom Italia (BIT: TIT) private for around €33.2 billion, or €0.505 per share (45% premium to Friday's closing price), including the assumption of more than €20 billion in net debt.

Why it matters: This would be one of the largest-ever leveraged buyouts of a European company. It also sets up a possible battle between KKR and French media giant Vivendi, TIM's largest outside stockholder, which paid an average of more than €1 for each of its shares.

Details: KKR's offer is described as nonbinding and indicative, and would need approval from both the company and the Italian government.

The bottom line: "KKR's plan would see TIM carve out its fixed network to be run as a government-regulated asset along the model used by energy grid company Terna or gas grid firm Snam ... The government wants any plans for TIM's grid to be in line with the goal of rapidly completing broadband rollout across Italy, supported by adequate investments, and protecting jobs." — Reuters

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