Indebted TIM received a non-binding takeover approach from KKR in November that indicatively valued the former telephone monopoly at 33 billion euros ($38 billion) including debt.
But a power vacuum sparked by the ousting of chief executive Luigi Gubitosi following a series of profit warnings last year has delayed the group’s response to KKR, which has requested access to the company’s data. company before making a formal offer.
KKR’s offer is conditional on support from the company’s board and the Italian government, but TIM’s largest shareholder Vivendi said it did not reflect TIM’s value.
The new three-year plan, which will be developed on a stand-alone basis, will consider a series of options to increase value, such as spinning off assets, including its strategic network business, the sources said.
TIM, which has appointed Goldman Sachs and LionTree as advisers to assess KKR’s offer and other options, has brought in Italians Mediobanca and Vitali & Co to help with the plan, the sources added.
TIM’s landline network is the group’s most valuable asset and there have been calls from its No. 2 shareholder, state lender Cassa Depositi e Prestiti (CDP), to relaunch a stalled merger plan of the network with its fiber optic rival Open Fiber to increase returns and avoid double investments.
CDP owns 60% of Open Fiber.
On KKR’s bid, CDP is working with Credit Suisse, the Italian Treasury with Lazard and Vivendi with Rothschild, the sources said.
TIM is expected to approve the guidelines for its new plan at a board meeting scheduled for January 26, one of the sources said.
TIM, which has yet to find a replacement for Gubitosi, has commissioned headhunter Spencer Stuart to find a new CEO and the process is expected to be finalized in January.
Pietro Labriola, the head of TIM’s Brazilian operations who was named chief executive in November, is seen as a top candidate, sources said.