CVC, KKR Reportedly Considering Joint Bid for Telecom Italia
KKR & Co. Inc. (NYSE:KKR) and CVC Capital Partners Limited are considering teaming up on a bid for Telecom Italia S.p.A. (BIT:TIT), a move that would help share the financial burden for Europe’s biggest-ever leveraged buyout, people with knowledge of the matter said. The two investment firms have held exploratory talks about the potential for a joint offer, according to the people, who asked not to be identified because the information is confidential. KKR has been among the most active dealmakers globally since the start of the pandemic. CVC has already been studying a possible acquisition of Telecom Italia for several months, according to the people. The private equity firms are still debating the merits of teaming up, and there’s no certainty they will proceed with a joint offer, the people said. The considerations range from CVC being an equal partner to joining as a minority investor, the people said. Advent International, which had been in talks about partnering with CVC, has cooled on the idea due to the complexity of the transaction and the Italian government’s perceived support for the KKR bid, the people said. Representatives for KKR, CVC and Advent declined to comment. Telecom Italia’s press office didn’t immediately respond to emailed queries. KKR has made a preliminary bid of €50.5 cents per share for Telecom Italia, valuing the company at around €10.8 billion ($12.1 billion). CVC and Advent said this week they’re open to working with all stakeholders to identify how to help Telecom Italia. Vivendi SE, Telecom Italia’s largest shareholder, has already described KKR’s current offer as too low. The U.S. suitor has been considering how much it would need to raise its bid to win over reticent investors, Bloomberg News reported November 26, 2021. Telecom Italia Chief Executive Officer Luigi Gubitosi urged the company’s board to take swift action on KKR’s bid. In a letter to Telecom Italia board members seen by Bloomberg News, Gubitosi wrote he’s ready to resign if it would help speed up the process of evaluating the offer. Including Telecom Italia’s 22 billion euros of net debt, a takeover of the company would rank as Europe’s biggest-ever private equity buyout, according to data compiled by Bloomberg.