And to think that the eve was certainly not reassuring and even tinged with yellow. A deadly combo for Tim, in view of the approval of one of the most delicate industrial plans in the history of the telephone group, at least since its privatization.
The one that leads straight to the separation of the network, with the creation of two companies, after the acceleration caused by the arrival of Pietro Labriolaat the helm of the former monopolist: on the one hand ServiceCo, which will enclose the services part, on the other NetCo, the box into which the secondary network that goes up from the streets into the homes, and today embedded in Fibercop, converge. Once the spin-off is completed, the network assets of the former Telecom should merge with Open Fiber, to give life to the longed-for single infrastructure under public control, through Cassa Depositi e Prestiti, a 9.8% shareholder of Tim. HIGH VOLTAGE EVE
In the background remains the possible takeover bid by Kkr, and it is precisely on this point that the tension on the eve of the board called to approve the 2021 accounts and the industrial plan, the first bearing the signature of Labriola, has risen frightfully. In fact, in the hours preceding the meeting, rumors circulated about the willingness of Tim’s shareholders, but denied by the same company, to stop once and for all the appetites of Kkr, which last November presented an offer of 50 cents per share for the 100% of the telephone group, only to entrench themselves in a strange silence.
The stock was immediately affected, also because the rumors about the bad performance of 2021, starting with the write-downs of at least 4 billion, the result of a profound cleansing of the balance sheet and reduced margins and revenues, did the rest. Moral, collapse of 9% to 0.34 euros per share in a single day, on the levels of last November before the US fund revealed its interest. It is no coincidence that the former Telecom has already set up corrective actions, such as the sale of the Inwit towers to the Ardian fund (which at the shareholders’ meeting presented an offer for 30% of the Daphne holding, which controls 30% of Inwit), from which it could generate 1.4 billion euros.
And despite the warning from the trade unions in view of the spin-off of the network, between now and 2024 Tim would only plan voluntary and incentivized redundancies for 4,000 employees, slides and social safety nets for another 4,000. It must be said that the convergence between Tim and CDP on the single network, now full-blown after the approval of the plan, would certainly derail the plans of the US fund. TOWARDS THE SINGLE NETWORK
However, that sprint towards the separation of the network, the embryo of the future broadband company, arrived from the council. The board has in fact “approved the new industrial plan for 2024 which starts a transformation process based on the creation of netco and servco, overcoming the vertical integration model”. In this regard, the board of directors which has given the CEO mandate “to develop the executive reorganization project which will be presented within the six-month period. With the current configuration, on the other hand, Tim expects a slight growth in revenues from services and the stabilization of the EBITDA in the three-year period ”. DEEP RED
And here is the 2021 balance sheet, marked by three profit warnings that have crippled the stock on several occasions and cost, in part, the position of CEO toLuigi Gubitosi . Analysts had expected a 4% decline in fixed network revenues and 6% mobile revenues with a domestic market Ebitda down 30% in the fourth quarter.
The 2021 accounts are hard to digest. In fact, Tim closed the year with a loss of 8.7 billion after the devaluation of domestic goodwill for 4.1 billion euro and the write-off of 3.8 billion euro by the parent company of the deferred tax assets. reads in the note issued at the end of the meeting. Obviously, no dividends will be distributed, since the same board “has proposed to the meeting not to distribute dividends”. KKR OFFSIDE
Now, one basic question remains. What will become of Kkr and its takeover
Given that, as expected on the eve, a response to the fund did not come from the board, the lack of involvement of Kkr in the game is not to be excluded at all. Certainly, with Vivendi, the reference partner of the former Telecom at 23.7% deployed for the single network together with the other shareholders, the path of the US fund has now been cut. However, we must never forget that Kkr is a 37.5% shareholder of Fibercop, the embryo of NetCo. So one can certainly imagine Kkr’s involvement in NetCo whose roots lie precisely in Tim’s split between network and services.
