TIM Receives Offer From KKR for Network Division; Details Not Disclosed

Telecom Italia shares are up 8% to EUR 0.29 at the time of the writing as KKR, the U.S.-based private equity fund, has sent a nonbinding offer to purchase TIM's Netco division. Netco contains two businesses: (1) FiberCop, which includes TIM’s fiber network across Italy and in which KKR already owns a 37.5% stake, and (2) Sparkle, which owns terrestrial and submarine cables internationally. The potential stake to be acquired has not been decided yet. The purchase would result in the loss of vertical integration for Telecom Italia. We are maintaining our EUR 0.25 fair value estimate.