Tim flew to the top of the list at the opening of the session, then retracting a cautious rise (now + 0.57% at € 0.30) in the wake of the new rumors about a Cvc interest in ServCo that continue to feed the attention of the market on a rather complex dossier. “The Kkr offer is cooling down, but the appeal for individual assets is growing, with indiscretions of interest from Cvc for the domestic corporate business”, summarizes in this way Equita Sim the various indiscretions of this morning, which on Telecom Italia shares remain on a hold rating and a target price of € 0.4.
According to the press, analysts point out, “CVC would be interested in the domestic business activities that Labriola intends to corporate. These activities have generated almost 30% of ServCo revenues with a profitability that we imagine is higher than the average 23% of the division”. Furthermore, according to rumors, CVC has yet to outline the action plan, clarifying whether it is interested in the majority of the asset and whether it will be necessary to launch an offer on Tim. “In our opinion, it is more likely to think of an operation for a minority, given the presence of assets of strategic importance subject to golden power in the perimeter, and the consistency of a minority deal with Tim’s strategy aimed at enhancing individual assets of the group,
Furthermore, for experts, the entry of a partner could also finance growth projects, such as the national cloud, and reduce the debt of the group. “Such an operation would have positive impacts for Tim as today this business in our sum of parts is valued at a compressed multiple and for the entire ServCo of 5.5 times due to competitive dynamics and high leverage. while the cloud activities alone (about 50% of the total) could deserve multiples greater than 10 times. As a sensitivity, a multiple of 10 times for the entire Enterprise division would bring out 16 cents of extra value “, added the analysts.
Finally, with regard to Kkr and the indiscretions relating to the coldness of the government on the takeover hypothesis, the impression of the experts also looking at the initiatives underway to value separately the assets of the group, from NetCo to ServCo, and that in fact the chances of see Kkr’s formal offer for the entire group materialized are reduced. Kkr’s response to the letter of clarification on the plan and on the financial details relating to the US fund’s expression of interest in Tim’s 100% stake at € 0.505 per share, however, seems to be imminent. “I await the response from Kkr at any moment,” Tim’s president Salvatore Rossi told Mf Dow Jones News at the round table organized by Fistel CISL, without providing further details.
According to Banca Akros (accumulated rating and target price at 0.40 on Tim) the rumors seem to refer to a broader ServCo that would include both the national one and Tim Brazil, so that it is not clear whether the focus of the fund has actually changed or less. Despite this, analysts weigh the news as a modest increase in speculative appeal, taking into account that CVC is an actor already involved in this game several times. Intesa Sanpaolo is also of the same idea, whose analysts reiterated that in recent months the interest of CVC in Tim has already been emphasized. “We think that, in a disruption scenario, Vivendi would focus on the ServiceCo and therefore Cvc could collaborate with the French company, if its interest is confirmed”, the bank concluded. (All rights reserved)
