Telecom Italia (TIM) stock continued to plunge on the Milan Stock Exchange on Friday, losing more than 8%, due to investor concerns about its poor financial results in 2021 and its gloomy outlook for 2022. Around 11:45 a.m. (10:45 GMT), the title fell 8.49% to 0.270 euro, in a market down 4.25%, also penalized by fears raising fears of the invasion of Ukraine by Russia.
The action of the Italian operator had closed down 13.99% at 0.295 euros on Thursday, the lowest for sixteen months, the day after the publication of its 2021 results which showed an abysmal net loss of 8.65 Billions of Euro’s. The results were published in a very tense context for the operator, coveted by the American investment fund KKR, which said it was ready to pay 10.8 billion euros to buy it back, and in full upheaval with the arrival of the new CEO, Pietro Labriola.
The prospect of a KKR takeover is receding
Pietro Labriola’s 2022-2024 strategic plan, approved on Wednesday by the board of directors, removes the prospect of a takeover bid from KKR, thus depriving shareholders of a significant premium on the stock market. “The probability of a KKR offer now seems to be very low (…), the fund could decide to withdraw or launch a hostile takeover», According to analysts from Banca Akros. The plan includes a split between the fixed telephony network and the service activities, aimed at better valuing each of the future entities. Analysts were also disappointed by the gloomy financial outlook of the plan, which notably forecasts for this year a double-digit drop in the group’s organic operating profit (Ebitda), which has already fallen by 11.6% in 2021. Banca Akros experts expect a drop in Ebitda of “15 to 20%in Italy in 2022.
Anxious to reduce its huge debt, TIM is in negotiations with the French investment fund Ardian, which has offered to acquire a 41% stake in Daphne 3, a holding company that owns 30.2% of the telecom tower company Inwit. The amount of the transaction is estimated by TIM at some 1.3 billion euros.