(Adds minister's comments)
MILAN, Dec 2 (Reuters) - Telecom Italia (TIM) is
looking to draw up a list of candidates on Friday to advise it
on a takeover approach from U.S. group KKR as banks
jockey for position in Europe's biggest ever private equity
But divisions within Italy's biggest phone group are making
it difficult for the company to respond to KKR's non-binding bid
approach valued at 33 billion euros ($37.40 billion) when debt
is factored in.
Tensions are still running high after a shareholder row a
week ago forced Luigi Gubitosi to step down as CEO following a
clash with the group's top investor Vivendi and
independent board members.
In last week's drama, TIM placed oversight of the group's
strategic assets in the hands of Chairman Salvatore Rossi,
setting up a special committee to study the KKR approach that
was made public on Nov. 21.
But top management remains in limbo and the board split on
Two people close to the matter said the Vivendi
representatives and other board members are pushing for a full
board reshuffle after Gubitosi refused to formally step down
from the board - a move that prevented new general manager
Pietro Labriola being named CEO last week.
"The committee is meeting on Friday to discuss advisers but
it's not clear if they'll succeed given all the upheaval," one
of the sources said.
Vivendi declined to comment.
KKR - which industry sources said was working with Citi,
Morgan Stanley and JP Morgan - has said any deal is conditional
on support from the Italian government as well as the TIM board.
"But right now there is no management team at TIM and there
is no more strategic plan ... how can you evaluate a bid if you
have no standalone strategy plan?" another source familiar with
the matter said.
Goldman Sachs, Intesa division IMI CIB and Bank of America
had been lined up for a possible role in advising TIM before
Gubitosi stepped aside, two other sources said, but they added
that the situation was uncertain.
Rothschild and Lazard are now also squaring off for a role
with TIM, the sources said.
KKR's non-binding offer is also dependent on a four-week due
diligence which will need a green light from TIM. No special
board meeting has been called to date ahead of a scheduled
regular meeting on Dec.17.
The Italian government, which is TIM's second-largest
investor with a 10% stake, has special anti-takeover powers to
shield companies deemed of strategic importance from foreign
Addressing parliament on Thursday, Industry Minister
Giancarlo Giorgetti said it was too early to say if the
government would use any special powers in regard to KKR.
He said some of TIM's assets needed to be under public
Prime Minister Mario Draghi has already said Italys
in the matter are to safeguard jobs, technology and the network
infrastructure at TIM.
($1 = 0.8823 euros)
(Reporting by Elvira Pollina, Stephen Jewkes and Pamela
Barbaglia, additional reporting by Gwenaelle Barzic
Editing by Keith Weir, Jane Merriman and Susan Fenton)