27/05/2022 16:00
Sitting under the banner of low volatility for Tim after yesterday’s Board of Directors which took stock of the single network and other issues in view of the presentation of the reorganization of the group scheduled for next 7 July. According to various sources, it could be signed as early as next week on memorandum of understanding between Cassa Depositi and Telecom Italia to continue with the single network project. The ambitious project involves combining Tim’s landline with that of his smallest rival Open Fiber, which is controlled by CDP. Macquarie Group, a minority investor in Open Fiber, also plans to join the agreement, as does Kkr, which owns a stake in FiberCop, and after months of reluctance it would be evaluating the possibility of signing the MoU.
Therefore, we would be one step away from the letter of intent between TIM, CDP, KKR and Macquarie for the single network project, even if there is no lack of elements that will have to be defined once the MoU has been signed. From this point of view we discuss the exact perimeter of the assets, the valuations but also the governance of the company. According to reports from Il Sole 24 Ore, Tim would be oriented to prefer the sale of the control of NetCo, rather than the demerger. By doing so, the proceeds would go to reduce the debt of the group, the times would be faster and also the risk of the savings shareholders would be eliminated, who could veto a demerger by building a NetCo of only own shares. In this context, it is therefore crucial to understand the valuations of the asset, to evaluate the scenario of a transfer of control of NetCo.
Equita analysts, who maintain a hold recommendation with a target price of € 0.39 on TIM, estimate a total enterprise value (EV) of € 21 billion pre-synergies for NetCo, a measurement of approximately 9x EV / EBITDA . Equita speculates 1 billion euro of synergiesa value well below the 4.5-5 billion indicated by the press rumors.