(Bloomberg) -- Telecom Italia SpA’s board of directors unanimously ruled on Thursday that it would not grant KKR & Co. the due diligence repeatedly requested by the U.S. private equity firm to go ahead with its 10.8 billion euro ($11.8 billion) takeover proposal.
The move puts a stop to KKR’s intended bid, which has been pending since last November.
“If KKR decides to unveil a concrete, complete and attractive offer that would include the price per ordinary and savings shares Telecom Italia’s board could reconsider its decision,” the phone carrier said in a statement.
KKR also had other reasons for not wishing to proceed with the potential deal including Telecom Italia’s profit warning last December as well as new lower company guidance and credit agency downgrades, Telecom Italia said in its statement. A spokesman for KKR declined to comment on Telecom Italia’s decision.
The board’s decision marks a win for Telecom Italia Chief Executive Officer Pietro Labriola, who is working on an in-house proposal with a plan to merge landline assets with those of smaller, state-backed rival Open Fiber SpA. That would align Telecom Italia with a government goal of building a single national fiber network while avoiding duplicate investments.
Labriola’s plan could take several months and would need approval from European regulators, people familiar with the matter said in March.
Telecom Italia’s board also confirmed Labriola as CEO and general manager, the company said.
Separately, CVC Capital Partners last month made a non-binding offer for 49% of Telecom Italia’s new enterprise services unit, valuing it at an enterprise of about 6 billion euros, according to people familiar with the matter. The phone carrier considers that valuation as too low and remains open to discuss with CVC an increased as well as a more detailed business plan, the people added.
A spokesman for Telecom Italia declined to comment on CVC. A spokesman for CVC also declined to comment.
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