Private equity giant KKR (NYSE:KKR) is gearing up to make a multi-billion euro bid for the landline grid of Telecom Italia (TLIT), according to Reuters.
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The deadline to submit bids for the grid is set for Sunday, and reportedly, a transaction with KKR is at the heart of Telecom Italia CEO Pietro Labriola’s strategy to reshape the erstwhile phone monopoly. The group is saddled with a net debt of $27.6 billion amid fierce price competition in its home market.
Specifically, the bid for NetCo, a venture made up of TLIT’s fixed access network and submarine cable unit Sparkle, is pegged at about 23 billion euros. The price tag is expected to include a debt component of 10 billion euros and up to 2 billion euros associated with a future combination with Open Fiber, an operator of fiber-optic.
Reportedly, the offer encompasses TILT’s 40,000 employees being absorbed into NetCo, and the deal has been endorsed by Italy’s Prime Minister Giorgia Meloni’s government. The country’s treasury plans to join KKR’s bid and pick up a stake in the range of 15% to 20% in NetCo.
Is KKR a Good Stock to Buy?
Overall, the Street has a Strong Buy consensus rating on KKR. The average KKR price target of $74.29 implies a 21% potential upside.
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