Tim, Mandate to Labriola to close with Mef the sale of Sparkle
The board of directors decided 'unanimously' to 'initiate talks with the bidders, exclusively on the EUR 700 million offer
3' min read
3' min read
Mandate to Managing Director Pietro Labriola to close the sale of Sparkle with the MEF. This was decided by Tim's board of directors, which met briefly last night when the stock exchange was closed, in order to respond to the Treasury, which, together with Retelit, presented a new €700 million offer for the international cable company this week. The board of directors decided 'unanimously', reads the press release, to mandate Labriola to 'initiate talks with the bidders, on an exclusive basis, aimed at investigating the economic and financial profiles of the operation and obtaining the presentation - by 30 November - of a binding offer under the best terms and conditions'.
Mef considered a related party
.The board also decided, again unanimously, to classify the MEF as a 'related party', in application of accounting standard IAS 28, 'insofar as it is the majority shareholder of the vehicle that would acquire the stake in Sparkle'. Consequently, explains the Tim note, 'for the evaluation of the Sparkle takeover bid, the provisions relating to transactions of greater significance set out in the procedure for carrying out transactions with related parties adopted by the company will be observed'.
The January offer presented only by Mef, which was deemed unsatisfactory by Tim's board of directors on 7 February, assigned Sparkle an enterprise value (equity plus debt) of 750 million, of which 125 million was to be recognised on the occurrence of certain unknown conditions that, however, were said to be difficult to fulfil. The new offer, agreed with the Spanish private equity fund Asterion, which controls Retelit, stops at 700 million, but overcomes the uncertainty of the earnouts.
The Mef Strategy
On Thursday, speaking at the forum organised by Bloomberg in Milan, Economy Minister Giancarlo Giorgetti stressed with regard to Sparkle that the operation 'bears witness to the fact that there is a collaboration with the private sector that wants to achieve modalities aimed at a more efficient response'. For years, the state has shown interest in directly overseeing Sparkle due to its strategic value: suffice it to recall that even today the majority of connections from Israel to the Americas are safely entrusted to the Italian carrier.
If the deal eventually goes through, the majority of Sparkle's capital will be held by Mef, while Retelit, with whom a merger is reportedly not planned, is expected to bring the possibility of developing industrial synergies thanks to its portfolio of business customers in rich areas of the country.
