KKR’s bid target Telecom Italia appoints veteran manager Labriola CEO


By Elvira Pollina

MILAN (Reuters) -Telecom Italia (TIM) appointed General Manager Pietro Labriola CEO on Friday, two sources close to the matter said, as the former phone monopoly weighs a response to a takeover approach by U.S. private equity investor KKR, . Labriola, a veteran TIM executive who has run TIM’s Brazilian operations for the last three years, was promoted to general manager in November, when former CEO Luigi Gubitosi stepped down following a string of profit warnings.

Under pressure for years in its competitive domestic market, debt-laden TIM needs to upgrade its network to meet Italy’s digital plans to boost broadband speeds for millions of households and businesses. Labriola’s nomination had been promoted by the group’s largest investor, French media giant Vivendi. Its appointment was unanimously approved by the board on Friday, the two sources added, asking not to be named.

Vivendi, which holds 24% of TIM, has criticised KKR’s 10.8 billion euro ($12.2 billion) offer, saying it does not reflect the value of Italy’s biggest telecoms operator. Labriola already has responsibility for devising a business plan to revamp the group that would serve as a benchmark for the company’s board to weigh against KKR’s proposal.

Under a preliminary version https://www.reuters.com/business/media-telecom/telecom-italia-gm-outline-plans-doubts-kkrs-bid-mount-2022-01-18 presented to the board of directors this week, Labriola drafted proposals to split the company’s fixed network operations from its services businesses, the sources said.


The “NetCo” comprising TIM’s infrastructure assets would focus on its wholesale-only business. It would include submarine cable unit Sparkle, while assuming a significant portion of the company’s debt and staff, the sources added.

That could help revive a stalled plan to merge TIM’s fixed network assets with those of fibre optic rival Open Fiber, a project CDP https://www.reuters.com/markets/deals/tim-shares-up-state-investor-cdp-calls-single-network-2022-01-03 earlier this month urged TIM to revive to avoid a costly duplication of investments.

CDP, which owns 60% of Open Fiber, would likely emerge as a major stakeholder in any combined network venture with TIM.

Vivendi, which last month https://www.reuters.com/markets/deals/vivendi-is-open-discuss-with-rome-over-state-control-tims-network-2021-12-05 reversed its long-standing opposition to TIM’s handing over control of its prized network infrastructure, could then focus on TIM’s retail service businesses, which include video content platform TimVision, one of the sources said.

KKR’s takeover proposal is conditional on backing by TIM’s board and the Italian government, which deems the group’s network infrastructure strategic and has special powers to block unwanted interest.

KKR, which already holds 37.5% of TIM’s last-mile grid, plans to carve out the fixed assets and give CDP a leading role in overseeing them, the sources said.

Any goverment decision on how to address TIM’s situation is on hold in Rome ahead of next week’s presidential election.

($1 = 0.8821 euros)

(Reporting by Elvira Pollina;Editing by Keith Weir and Barbara Lewis)