Telecom Italia Sees Record Daily Trading after Buyout Offer by KKR

After a $12 billion (€33.2 billion) takeover approach from US fund KKR, the Italian phone group Telecom Italia (TIM) saw record trading volumes on Monday, with more than 8% of its ordinary capital changing hands.

According to Refinitiv data, almost 1.3 billion Telecom Italy’s ordinary shares which carry voting rights had been traded by 1420 GMT, more than 10-times the average in the last 90 days and the highest number since records on trading volumes began in 1993.

The shares were also set for their biggest one-day gain on record with 29% rise.

In one of the largest-ever leveraged buyouts of a European company, Telecom Italia was offered or €0.505 per share on Friday by KKR, 45% premium to Friday’s closing price, including the assumption of more than €20 billion in net debt.

Though KKR’s offer is nonbinding and indicative at the moment, and would need further approval from both TIM and the Italian government, it does set up potential battle with TIM’s largest outside stockholder, French media giant Vivendi, which paid an average of more than €1 per share.

The US fund’s offer might put an end to the years of wrangling between investors, board members and politicians, yet it is opportunistically below TIM’s pre-pandemic value so KKR must first engage in serious action to convince Chair Salvatore Rossi and the rest of Telecom Italia’s board that their offer is worth considering.

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