United States fund KKR’s proposal to acquire Telecom Italia (TIM) comprises of a letter of commitment by JPMorgan to support the 45 billion euros ($51 billion) financing that is required for the deal, as explained by a report published by Italian daily Il Messaggero.
JPMorgan confirmed in a letter that it was ready to lift its commitment above 45 billion euros in case there was a need to do that. For now, KKR and JPMorgan are yet to comment on this matter.
However, two sources familiar with this issue said that JPMorgan is involved in the arrangement of financing for the deal. Reliable sources previously said that the American investment bank was advising KKR, Citi, and Morgan Stanley.
In a non-binding proposal that was submitted to TIM’s board, KKR has already set an indicative price of 0.505 euros per share, valuing Italy’s largest phone group at 10.78 billion euros translating to 33 billion euros including TIM’s net debt of around 22.5 billion euros.
Il Messaggero explained that 34 billion euros in the financing package would be used to refinance TIM’s debt under a “change of control” clause. The additional 11 billion euros represents a cash confirmation needed by market regulators to cover the offer’s equity value entirely.
TIM had 30.7 billion euros in gross debt at the end of September 2021.