MILAN (Reuters) -Telecom Italia (TIM) turned its back on a takeover approach from KKR on Thursday when it refused to grant the U.S. fund access to its books because it had not confirmed bid terms.
KKR first approached TIM last November with a non-binding offer valuing the company at 10.8 billion euros ($11.8 billion) but TIM only agreed to open talks last month.
In a statement after a board meeting, TIM said that it cannot grant KKR access to its data room as the fund did not validate the terms of its initial 0.505 euro per share approach, confirming what sources had earlier told Reuters.
“Should KKR submit a deliverable, complete and attractive offer … TIM Board of Directors would be open to reconsidering its decision in the interest of all shareholders,” TIM said.
KKR declined to comment.
Leading TIM shareholder Vivendi had said the KKR approach was too low, even though it is well above the current price of 0.31 euros.
TIM’s move comes as new boss Pietro Labriola is pressing ahead with a strategy to revamp the company centred around a split of its wholesale network operations from its services business.
Details of the Labriola’s plan, aimed at unlocking what the debt-laden group calls its untapped value, would be fleshed out by the summer.
As part of this, TIM has signed a non-disclosure agreement with Italian state lender CDP to start formal talks on potentially combining the phone group’s network with that of smaller broadband rival Open Fiber.
Such a deal, advocated by the government, could entail a role for infrastructure and private equity funds, including KKR, sources have previously said.
“KKR ultimately confirmed its interest in exploring any other transactions in the interest of the company, its shareholders and Italy,” TIM said in its statement.
KKR is already an investor in TIM’s last-mile fixed-line network, having invested 1.8 billion euros to secure a 37.5% stake in a venture called FiberCop.
CDP, which holds a 10% stake in TIM, holds a 60% stake in Open Fiber and aims to secure full control of any combined network entity, sources have said.
Separately, TIM is assessing an approach by European private equity fund CVC which submitted a non binding bid for a minority stake in an enterprise services business that could be spun out of the group.
Other private equity funds, including Apollo and Apax Partners, are circling TIM with the view to buy into its services business, sources have said.
($1 = 0.9182 euros)
(Reporting by Elvira PollinaEditing by Keith Weir, Kirsten Donovan)