Telecom Italia (TIM), whose main shareholder is the French group Vivendi, continued its fall on the Milan Stock Exchange on Monday, losing more than 5% to fall to a new historic low.
The stock closed down 5.45% to 0.236 euro, despite a temporary rebound in session of more than 10%, in a market down 1.36% under the effect of tensions limiting the invasion of the ‘ ‘Ukraine through Russia’. It had already lost 15.56% on Friday and 13.99% on Thursday, after the announcement of an abysmal net loss of 8.65 billion euros in 2021, due to significant asset write-downs. CEO Pietro Labriola produced a series of meetings with Italian and international investors on Monday to convince them of the merits of his strategic plan adopted by the board of directors on Wednesday, news that lifted the stock for part of the session. This plan provides for a split between the fixed telephony network and the service activities, aimed at better valuing each of the future entities.
Another factor that supported the title, the deputy general manager of TIM, Stefano Siragusa, acquired 450,000 shares on Monday for just over 100,000 euros. Coveted by KKR, which said it was ready to pay 10.8 billion euros to buy it back, the operator has still not given an answer to the request from the American investment fund to access its accounts before launch a takeover bid. KKR’s offer, or 0.505 euros per share, is well above the current stock market price, but was deemed too low by Vivendi, which entered the capital in 2015 at an average purchase price of 1.071. euro per share.
Pietro Labriola’s plan removes the prospect of a takeover bid by KKR, thus depriving shareholders of a significant premium on the stock market price, hence the nervousness of investors. 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.