Italy’s largest telecoms operator says it is at last considering the private equity fund’s non-binding €0.505 a share offer. Made in November, this valued the group at €33bn including net debts. A lot has happened since, including the appointment of chief executive Pietro Labriola. His plan to split the company in two, announced in March, is strikingly similar to KKR’s own proposals.
The new broadband infrastructure company had revenues of €5.2bn last year. These include revenues from FiberCop, the last mile broadband network of which KKR acquired a two-fifths stake for €1.8bn in 2020. The new broadband company will be able to capture growth from rising broadband prices with a greater share of that going to FiberCop as fibre rollout continues.
On the 8.7 times ebitda multiple KKR paid for its FiberCop stake, the broadband company would be worth just over €19bn on this year’s earnings. Assuming leverage of 7 times, a buyout at that price might see KKR making a 1.9 times return on its investment. The annualised return over six years would then be 16 per cent.
Read more: TheNYLedger
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