June 28, 2022

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Tim, Cdp and Open Fiber stick to the single network – Economy

Tim, CDP and Open Fiber give themselves 5 months, until October 31, to come to a binding agreement on the Unica network. This is the first commitment made by the three companies under the MoU. The Board of Directors met in an extraordinary session to give the green light to the initial agreement and the signatures below the letter of intent is the first step on a path that is still long but represents a real revolution in the building. On paper, every option is valid but the selling hypothesis seems to be Tim’s favourite. Tim’s network, from the backbone to the last mile and with this also the international part with Sparkle, will be sold to Open Fiber, in exchange for transferring a large part of the debt or even in full cash payment (we’re talking about an 18 billion euro valuation), things that will now be the focus of discussions . The reinforcement and its synergies as well as the actual surroundings and the workforce it brings with it. The first reflection will be in the grid split project that CEO Tim Pietro Labriola will present on Market Day on July 7. The deal will allow Tim to focus on the services business, leaving all of the mobile business on 5G and cloud frequencies. From (formerly) to Olo, the Copernican Revolution. Meanwhile, the joint venture is running in parallel, which should tend to flow into Netco but at the moment has a life of its own, and thus has been submitted to the EU. Pending the green light in Italy, Agcom has been asked to review prices in light of inflation and the authority can have its say as early as tomorrow, when the board meeting is scheduled. A stumbling block to regulatory licenses has cast doubt on TIm’s shareholders in Fibercop, Kkr and Fastweb. The previous memo, signed by Tim and CDP in August 2020 and then remaining a dead letter, was given seven months to reach, after due diligence on assets, an agreement on the merger, which will then be followed by an executive and licensing phase of uncertain times. To make the path less complicated, there is Tim’s willingness to relinquish control of the future single network, which the former monopolist already appears willing to decouple and monetize, at least in part, to reduce his debt and restore the degree of investment. Intermonte Infrastructure analysts allocate an enterprise value (capital plus debt) of 25 billion euros, of which 16.7 is attributable to Tim’s assets and 8.6 to Open Fiber, with the potential for synergies – according to rumors – of 4-5 billion. To assign a value to TIm’s subsidiary Netco, “it is essential to understand the valuations of the assets” but also “how much debt can be allocated to them,” Equita asserts.

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