Skip to Content

Telecom Italia SpA ADR TIIAY

Rating as of

Morningstar’s Analysis

Valuation
Currency in USD
Is it the right time to buy or sell?
Find out with Morningstar Premium
Is it the right time to buy or sell?
Find out with Morningstar Premium

1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

KKR Offers EUR 0.505 to Take Telecom Italia Private, a 44% Premium; FVE Raised to EUR 0.45

Javier Correonero Equity Analyst

Analyst Note

| Javier Correonero |

The rumors of a potential takeover of Telecom Italia have finally been confirmed, as private equity firm KKR yesterday made a friendly offer to acquire Telecom Italia for EUR 0.505 per share (all cash), which represents a 44% premium to the Nov. 19 closing price of EUR 0.35 and a 26% premium to our previous EUR 0.40 fair value estimate. Although in our opinion the tender offer is more than fair for Telecom Italia’s shareholders, shares haven't yet reached the offer price and are trading at about EUR 0.43 at the time of the writing, as the offer still needs approval from the board of directors and Italian government, which has a veto right as telecom assets are considered of strategic importance. We're raising our fair value estimate to EUR 0.45 per share from EUR 0.40, implying a 50% chance of approval. Some media also reported that Vivendi, Telecom Italia’s largest shareholder with almost 25% of the firm and which appoints two out of 15 directors of the board, could consider the offer as insufficient. This is, in our opinion, the higher source of uncertainty as Vivendi has been the main protagonist of corporate disagreements in the past.

Read Full Analysis

Company Profile

Business Description

Telecom Italia is the incumbent telephone operator in Italy with more than 30% market share in the Italian mobile market and 45% market share in broadband. In the mobile market it competes with Vodafone, Wind Tre and Iliad. On the broadband side, its main competitor is Open Fiber, which operates a wholesale network giving equal access to several operators. TIM also has a 21% wireless market share in Brazil and has started building a broadband network in the country, although its reach is very small compared with its competitors Telefonica and America Movil.

Contact
Corso D'Italia, 41
Rome, 00198, Italy
T +39 636881
Sector Communication Services
Industry Telecom Services
Most Recent Earnings Sep 30, 2021
Fiscal Year End Dec 31, 2021
Stock Type
Employees 42,811

Related