Tim Sunday’s Board of Directors (BoD) Approved the firm purchase offer presented by the American fund KKR (Kohlberg Kravis Roberts & Co) for part of its infrastructure network, the one which refers to NetCo and the subsidiary FiberCop, of which KKR already owns 37.5% hundred of the quotas.
The offer, presented after months of lengthy negotiations, has a value of 18.8 billion euros, which under certain conditions could reach 22 billion euros. The offer was presented by KKR on October 16 and was approved by Tim’s board of directors with 11 votes in favor and 3 against. The operation should notably allow Tim to reduce its debt by around 14 billion euros. The entire operation is expected to be completed by summer 2024 and also includes the participation of Cassa Depositi e Prestiti (CDP), a financial institution controlled by the Ministry of Economy which owns around 10 percent of the shares of Tim and who will participate in Netco for approximately 20 percent.
Tim’s main shareholder, the French company Vivendi, declared itself opposed to the deal, as has happened several times in the past. In particular, he challenged the decision of Tim’s board of directors to approve the acquisition by KKR without voting at the general meeting. Tim’s board of directors has in fact indicated that it had approved by 11 votes for and 3 against (the same majority which approved the entire operation) that the decision to approve the KKR offer was “under the exclusive competence” of the board of directors, because it did not involve the modification of the company’s statutes and therefore the vote of the assembly.
According to Vivendi, the decision of Tim’s board of directors is “illegal”, given that “the transfer of the entire infrastructure network of Telecom Italia implies a clear modification of Tim’s corporate purpose which would have required a prior modification of the company’s statutes, a decision falling within the competence of the extraordinary meeting. The French company claims that the takeover by KKR would be tainted by non-compliance with the rules concerning operations involving “related parties”, that is to say subjects having a certain influence on Tim itself and its operations. In this case, according to Vivendi, the related party would have been the Ministry of the Economy, whose presence would have required a visit to the assembly. Tim, however, after consulting some legal opinions, ruled out that this measure was necessary.