Telecom Italia CEO informs investors, shares slide again Reuters


© Reuters. FILE PHOTO: Telecom Italia (TIM) CEO Pietro Labriola poses for a portrait next to the company’s name at TIM’s headquarters in Rome, Italy, Jan. 17, 2022. REUTERS/Guglielmo Mangiapane/

By Elvira Pollina

MILAN (Reuters) -Shares in Telecom Italy (MI:) (TIM) hit rock bottom Monday when the head of Italy’s largest telephone group met with investors to convince them of the merits of his plans to revive the former telephone monopoly.

The TIM roadshow anticipates a soon-to-be-expected decision on a €10.8 billion ($11.7 billion) acquisition proposal to be made by US fund KKR in November.

A board meeting to draft a response to KKR’s proposal could be held next weekend once TIM’s advisers complete their analysis to compare TIM’s planned internal revamp with KKR’s plan, two sources close. stand by the case.

Ahead of their review this week, TIM’s advisers have asked the US fund to clarify whether the terms of the November offering still apply, the sources added.

TIM shares, which lost some 30% of their value in the last two sessions of last week, had another scorching day on Monday. The stock ended 5.5% lower at 0.236 euros after hitting a low of 0.22 euros.

Volumes today were more than six times the 30-day average, with nearly 5% of the voting capital changing hands.

The shares remain well below the EUR 0.505 level at which the KKR approach was pitched.

Backed by TIM’s leading investor Vivendi (OTC:), who labeled KKR’s proposal too low, CEO Pietro Labriola’s plan aims to structurally separate TIM’s fixed network operations from its retail operations.

Last week, Labriola said KKR’s plan for TIM was similar, but he believed it could generate more value internally for investors, including minority shareholders.

However, a third source said some members of TIM’s board of directors have reservations about dropping KKR’s proposal without further consultation with the fund.

Labriola held face-to-face meetings with investors in Milan and will also host a series of conference call briefings between now and Wednesday, the sources said.

VIDEO MESSAGE

The sources said Labriola had met with representatives from BlackRock (NYSE:), the world’s largest asset manager and a major shareholder of TIM. Foreign institutional investors own 41.3% of the group.

Labriola, an experienced TIM executive who in January became TIM’s fifth CEO in six years, tried to reassure employees about the company’s future this weekend in a video message to the group’s 42,500 domestic workers.

Labriola urged them not to panic and focus on serving customers and taking pride in TIM’s role as Italy’s leading telecom operator.

“Many of you are concerned; so am I, but make sure you distinguish between healthy anxiety and panic,” he said in the video.

The message went badly with the unions, who called his plan destructive and vowed to oppose it.

Affected by fierce competition in the domestic core market and regulatory constraints, TIM reported a record loss of €8.7 billion for 2021 and said it expects a decline in core profit in 2022, based on the current group structure. †

($1 = 0.9208 euros)

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