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Telecom Italia recovers from record lows as CEO meet investors
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MILAN (Reuters) -Shares in Telecom Italia (TIM) recovered from fresh record lows on Monday as the head of Italy’s biggest phone group met investors to convince them of the merits of his standalone strategy.
MILAN (Reuters) -Shares in Telecom Italia (TIM) recovered from fresh record lows on Monday as the head of Italy’s biggest phone group met investors to convince them of the merits of his standalone strategy.
The TIM roadshow comes ahead of a response expected by the end of the week from the former phone monopoly to a 10.8 billion euro ($11.7 billion) takeover proposal which U.S. fund KKR made in November.
After losing some 30% of their value in the last two sessions of last week, TIM shares initially tumbled by another 10% to 0.22 euros on Monday, touching fresh record lows.
However, after a recovery, the stock was up 4% in late morning trade in Milan against a 2% fall in Italy’s blue chip index The shares remain way below the 0.505 euro level at which the KKR approach was pitched.
In a video message to the group’s 42,500 domestic staff over the weekend, Pietro Labriola, a veteran TIM executive who in January became TIM’s fifth CEO in six years, urged them not to panic.
Labriola called on staff to focus on serving customers and take pride in TIM’s role as Italy’s main telecoms operator, and said a negative market reaction was no surprise given the company’s results.
Hit by stiff competition in its core domestic market, debt-laden TIM reported a record loss last year and said it expected a low-teens decrease in its 2022 core profit.
Unveiling his three-year strategy for TIM last week, Labriola said he was convinced his plan to hive off TIM’s fixed network assets from retail operations would give the group more leeway to unlock TIM’s real value.
Backed by Telecom Italia’s leading investor Vivendi, which billed KKR’s proposal as too low, Labriola’s plan is centered around the structural separation of TIM’s fixed network business from its retail operations.
Last week Labriola said that KKR’s plan for TIM was similar but added he was convinced doing it internally could generate more value for investors, including minority shareholders.
($1 = 0.9208 euros)
(Reporting by Elvira PollinaEditing by Keith Weir)
