KKR is offering €33 billion (around $37 billion) to take Gruppo TIM, the Italian telecoms group formerly known as Telecom Italia, private in what could be the biggest ever PE buyout in Europe.
The private equity firm, which already has a stake in the group’s grid operations, has offered to pay 50.5 euro cents apiece for all shares in the company. The price values the company at €10.8 billion, bringing the deal value to about €33 billion when TIM’s roughly €22.2 billion net debt, as of September 30, is included.
The deal would be the largest European PE buyout on record by some margin. The largest to be completed to date is the €17.2 billion takeover of TK Elevator led by Advent International and Cinven.
KKR has completed 33 buyouts in Europe this year worth €6.71 billion in total, however, if this latest deal goes through it would dwarf any of the firm’s previous year totals of buyout activity in the region.
TIM said it regarded KKR’s offer, which still needs approval from the board and management, as “friendly.” CVC Capital Partners and Advent are also reported to be open to discussions with TIM shareholders. The group is subject to so-called Golden Power, which allows the Italian government to restrict or prohibit foreign investment into strategic sectors.
The offer represents a more than 45% premium on the telephone and broadband giant’s closing price on Friday, Nov. 19. The group’s shares have since risen by around 30%, closing at 45.1 cents apiece on Monday.
KKR is currently in the market for its sixth European buyout fund, which was launched in January with a target of €5.8 billion.
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