Market rewards Tim after Poste's Opas, focus on synergies

 (Il Sole 24 Ore Radiocor) - In a stock market almost entirely coloured red due to tensions in the Middle East, in Piazza Affari (FTSE MIB) stands out Telecom Italia. Sunday in the evening Poste Italia, the tlc company's biggest shareholder with 27.32% of the capital, has launched a takeover offer (Opas) on 100% of Tim's capital aimed at delisting. The consideration for the offer consists of 0.0218 newly issued ordinary shares of Poste Italiane and a cash component of 0.167 for each Tim share contributed (valuation of 0.635 euro and a premium of 9.01%, equal to a total consideration of approximately 10.8 billion.

At present, the title trades below the valuation indicated in the offer, an offer that is conditional on obtaining the necessary regulatory approvals and is expected to be completed by 2026. In general, analysts are moderately optimistic about the deal; in particular, the market appreciates the strong strategic logic of the transaction and the synergies that will result from it, but at the same time they note some risks on the execution and integration front. In detail, Deutsche Bank's experts call Post's move "bold" and point out how the consideration indicated in the offer implies a "valuation for Tim - based on the closing price of 20 March - of 0.616 euro per share, corresponding to a premium of around 7%, according to our calculations. The transaction implies a total consideration of around €10 billion, compared to a market capitalisation of Poste of around €28 billion. According to our preliminary calculations, assuming the acquisition of 100% of Tim, shareholders would hold approximately 22% of Poste Italiane after completion of the transaction".

Intemonte underlines how "Poste's entry into Tim - in March 2025 - marked for the company led by Matteo Del Fante a new phase of business expansion. The operation is part of Poste Italiane's long-term strategy to create aleading systemic operator in the financial and insurance, logistics, telecommunications and digital services sectors. The platform company business model allows, with the integration of Tim, to exploit the convergence of networks, cloud, edge-computing, data and digital identity, opening new opportunities for the current and prospective customers of the Poste Group". According to the experts, 'if the offer is successful, both cost and revenue synergies appear feasible, moreover Tim/Poste will significantly increase its size and liquidity with an interesting value creation once the synergies are achieved, while at the same time it will also increase leverage considering the cash-out of up to 2.8 billion and the consolidation of Tim's debt'. And precisely on the tlc company, the business house points out that "at the offered price of €0.635, which compares with our target price of €0.75 and an average consensus target price of €0.70, the transaction crystallises a valuation in line with the Tlc sector (around 6 times the EV/EBITDAaL 2026 ratio) in a particularly volatile market context and does not preclude Tim's minority shareholders from participating, as new Poste shareholders, in thecreation of value linked to industrial synergies between the two groups'.

According to Equita, "from a financial point of view, on the basis of our preliminary estimates, the transaction is slightly dilutive in 2027 and we estimate it to be accretive by about 10% when fully implemented, compared to our pre-combined estimates. To be verified - underline the experts - the opportunity to accelerate the recovery of Tim's Dta, which are very significant (indicated by Poste in 982 million against Tim's total past losses of about 5 billion). Poste also indicated that the transaction will be neutral on the dividend to be paid from 2026 earnings'. Moreover, "the multiples paid for Tim are 5.9 times and 5.4 times the EV/EBITDA ratio as of 2026-27, not particularly generous even if the entry in Poste in our view offersmore visibility on the profitability outlook and remuneration of Tim shareholders and the benefits of synergies are partly captured by TIM shareholders themselves thanks to the paper component". Equita sees no criticalities on the green light to the transaction from the competent authorities. "We do not see any obstructive elements in light of the Antitrust observations already conducted in the analysis of Poste's entry into Tim".

A Jefferies report noted that "based on a valuation of EUR0.635 per share and Visible Alpha's EPS estimates, the transaction's implied P/E ratio is about 18 times in 2027. However, the consensus forecasts a strong acceleration in Tim earnings, with the P/E ratio falling to around 10 times in 2030 (while Poste trades at around 11 times expected 2027 earnings). The transaction is expected to increase EPS from 2027, and Poste does not expect an impact on the 2026 dividend per share. The financial profile of the combined company will remain compatible with an investment grade rating'. Finally, according to Banca Akros, 'in terms of earnings per share, Poste claims that the transaction will be accretive as early as 2027, while we calculate a dilutive effect of around 1% on EPS. However, we estimate that, on a pro-forma basis and with the full realisation of synergies, the transaction should be accretive to low double-digit EPS. We confirm our rating and target price" on Poste, explain the analysts, who confirm "our rating and target price for Tim, recalling that our target already includes about EUR 600 million of Npv from synergies with Poste".