Morning under the spotlight for Telecom Italia after the latest developments on the single network front. According to what emerged from press sources over the weekend, the government has put CDP’s project on hold to take over Tim’s infrastructure and combine it with the assets of rival Open Fiber.
The executive led by Giorgia Meloni would not be willing to implement the memorandum signed in recent months, under the leadership of the Draghi government. The letter of intent should have been transformed into a non-binding offer by 30 November by the Cassa and the partner funds Macquarie and KKR.
However, after having examined the project together with the competent ministers, the premier allegedly shelved this solution, asking for an alternative table to study new solutions to share with the stakeholders.
Dossier in the hands of Undersecretary Butti
The decision would have matured after Thursday’s meeting between Meloni, the Minister of Economy Giancarlo Giorgetti, that of companies and Made in Italy Adolfo Urso, the head of the cabinet Gaetano Caputi and the undersecretary Alessio Butti. The latter was given the powers to carry out an alternative operation, which is currently undefined.
As Repubblica points out, Butti has repeatedly criticized the single network and the conflict of interest of Cdp (60% shareholder of Open Fiber and 9.9% of Tim), pushing for the implementation of the so-called “Minerva plan” , which would see the whole of Telecom pass under state control (via takeover bid) and a subsequent combination with Open Fiber. A solution not appreciated by CDP, which in order to take over the majority of Tim would initially have to take over all the 26 billion of the telephone company’s debt in the balance sheet. The debt would then be reduced through the disposal of the stake in Tim Brasil and the assets relating to fixed and mobile customers.
The government’s renunciation of the CDP plan once again creates uncertainty over a dossier as important as it is thorny and puts Tim’s CEO Pietro Labriola in difficulty, who in recent months has worked together with the CEO of CDP, Dario Scannapieco, on the single network project . Furthermore, last November, Tim’s board rejected Labriola’s proposal relating to the immediate sale of a minority stake in Enterprise activities to raise cash. Now the manager will have to consider other options pending new offers from the government.
TIM: analysts’ opinion
Bestinver, which follows the stock with a Buy judgment and a target price of 0.73 euros, warns against a possible negative reaction from the stock, as the new postponement would be a little reassuring signal for investors and the situation remains somewhat undefined. The broker sees a CDP offer on Tim as an unlikely option, given the required cash outlay and CDP’s current holdings.
Equita (Hold, tp 0.39 euro) also sees the possible abandonment of the original MoU project as a negative factor, as it is once again delaying an important decision on a key issue. However, the analysts of the Milanese SIM confirm the speculative appeal of the stock, given the government’s willingness to bring Tim back under state control.
After a start in the red, with falls of around 4%, the stock has recovered ground and is currently traveling just above parity, up by 0.4% in the 0.226 euro area.