Telecom Italia SpA asked the two bidders for its landline network to increase their offers after a review rejected the bids as “not yet adequate,” the company said Thursday.
(Bloomberg) — Telecom Italia SpA asked the two bidders for its landline network to increase their offers after a review rejected the bids as “not yet adequate,” the company said Thursday.
The phone carrier’s board of directors asked the separate bidders, the Italian state lender Cassa Depositi e Prestiti and the US private equity firm KKR & Co., to sweeten their proposals.
“Considering the willingness expressed by at least one of the bidders to improve the offer, the board of directors decided to explore this willingness in order to obtain a final bid by June 9,” the company said in a statement.
KKR is the bidder that expressed willingness to increase its offer, according to people familiar with the matter. KKR declined to comment.
Shares rose as much as 4.4% to almost 0.26 euros in Milan trading on Friday.
Bloomberg News reported last week that Telecom Italia was expected to seek higher offers for its grid. The company needs to raise cash to cut its more than €30 billion gross debt pile.
READ MORE: Telecom Italia Investors Reject CEO’s €26 Million Pay Package
Last month the state lender, along with Australia’s Macquarie Asset Management, submitted an improved offer for the Telecom Italia network. Their newest bid, which expires May 31, values the grid at €19.3 billion ($21.3 billion), people familiar with the matter said at that time.
KKR also upped its offer, valuing the network at €21 billion, the people said. That figure includes debt and €2 billion in a performance-based “earnout,” which would provide future compensation if the business achieved certain financial goals, the people said.
The French media conglomerate Vivendi SE, Telecom Italia’s largest investor, has repeatedly said it values the grid at around €30 billion, and that it will reject any offer that doesn’t approach that level.
Some of Telecom Italia’s board members asked on Thursday for the company’s chairman, Salvatore Rossi, to appoint a new nomination and remuneration committee, according to the people. The proposal will be discussed at a May 10 board meeting. Shareholders last month rejected a proposed compensation package for the company’s chief executive officer amid Vivendi criticism. The company declined to comment.
(Updates with shares in fifth paragraph)
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