Telecom Italia CEO: Too Soon to Judge Poste Italiane’s Takeover Bid Value
Overview of Poste Italiane’s Takeover Bid for Telecom Italia
By Elvira Pollina
Initial Offer and Market Reaction
MILAN, May 7 (Reuters) - Telecom Italia (TIM) Chief Executive Pietro Labriola said on Thursday it was too early to say whether a cash-and-share takeover bid from state-backed Poste Italiane should be raised.
Poste, which last year became TIM's single largest investor, in March launched an 11-billion-euro ($13 billion) bid for the shares it does not already own, aiming to take the company private and create a national digital champion.
Analyst Perspectives
Some analysts have said that the offer is too low, indicating they expect a higher cash component.
"It is too early and unfair to say now if the Poste offer has to be increased or not", Labriola told analysts on a post-results call.
Board and Shareholder Considerations
He said TIM's board must give an opinion on the bid, but shareholders will assess it independently.
The offer was not agreed with TIM's board, which is expected to issue its opinion around August 10, a source familiar with the matter told Reuters.
Poste Italiane’s Position and Bid Details
Poste’s Financial Perspective
In a separate call on Poste's results, Poste Chief Financial Officer Camillo Greco said the premium implied by the bid could reach up to 50% based on unencumbered average prices, noting TIM shares have risen by about 110% since Poste's initial investment.
Poste said it remains on track to complete the deal by the end of the third quarter.
Offer Structure
Under the offer, Poste would pay 0.167 euros in cash plus 0.0218 newly issued Poste shares for each TIM share tendered.
Current Share Prices and Stake Details
At 1720 GMT, TIM shares traded at 0.69 euros, just above the 0.68-euro implied value of the offer based on Poste's current share price.
Poste, which offers logistics, financial, payments, broadband and insurance services, owns about 27% of TIM's ordinary share capital. That stake is set to fall towards 20% after TIM converts some special shares into ordinary stock this month.
($1 = 0.8496 euros)
(Reporting by Elvira Pollina. Editing by Mark Potter)
