MILAN (Reuters) -Shares in Telecom Italia (TIM) bounced more than 10% on Tuesday after an Italian newspaper reported that U.S. fund KKR was still interested in a takeover deal, albeit at a lower price.
KKR could confirm its interest in a deal but at a price of around 0.40 euros per share, Italian daily Il Messaggero reported.
KKR made a non-binding approach to TIM in November which was pitched at 0.505 euros per share, valuing Italy’s largest telecoms company at 10.8 billion euros ($11.8 billion).
KKR and Telecom Italia declined to comment on Tuesday.
TIM shares, which have plunged over the past three sessions, were up 10.7% at 0.2614 euros by 0950 GMT against a 3% rise in Italy’s blue chip index.
A board meeting to draw up a response to the KKR proposal could be held on Sunday once TIM’s advisers complete an analysis to compare TIM’s planned in-house revamp with KKR’s plan, two sources close to the matter told Reuters on Monday.
Ahead of their assessment this week, TIM’s advisers have asked the U.S. fund to clarify whether the terms of its November offer still stand, the sources added.
The shares have remained well below the takeover approach as leading TIM shareholder Vivendi had indicated it was too low.
A big annual loss reported last week and a standalone plan that has so far failed to win over investors added to the pressure.
SPLITTING UP
TIM CEO Pietro Labriola’s plan is centred around the structural separation of TIM’s fixed-network business from its retail operations.
Last week Labriola said that KKR’s plan for TIM was similar but that he was convinced doing it internally could generate more value for investors, including minority shareholders.
Some members of TIM’s board of directors have reservations about ditching KKR’s proposal without further talks with the fund, a source familiar with the matter said on Monday.
Splitting TIM’s wholesale network operations from its retail arm could ease a mooted merger of the former phone monopoly’s fixed assets network with those of fiber optic rival Open Fiber, a move advocated by TIM second largest investor, state lender CDP.
But a preliminary agreement on the plan failed to materialise so far, as Italy’s Innovation Minister Vittorio Colao warned it could create regulatory problems with EU funded tenders to boost fast connectivity across the country, people familiar with the matter said.
CDP controls a 60% stake in Open Fiber. ($1 = 0.9180 euros)
(Reporting by Elvira Pollina, Writing by Keith Weir; editing by Agnieszka Flak)