Shares of Telecom Italia (TIM) soared on Monday after receiving a “friendly” buyout offer from US private equity fund KKR valuing the operator at around €10.8 billion. Shares in Italy’s largest telecom rose as high as €0.45 on the Milan bourse, up almost 29 per cent from Friday’s closing price.

The public tender offer by New York-based Kohlberg Kravis Roberts regards the entire share capital of the company. TIM said the offer would be for an initial €0.505 a share. 

Italy’s economy ministry saluted the interest by KKR as “positive news for the country” in a statement on Sunday and said a working group would be formed to study the matter. The ministry said it was necessary to ensure that such a project would be compatible with the rollout of ultra-wideband in the country.

Italy’s economy ministry said it was necessary to ensure that such a project would be compatible with the rollout of ultra-wideband in the country

Any sale would need the approval from government stakeholders, as TIM’s network is considered a national strategic asset. 

TIM, which called an emergency meeting of the board to discuss the offer on Sunday, said the proposal was subject to around four weeks of due diligence and would require the backing of holders of least 51 per cent of both ordinary and savings shares.

KKR already has a 37.5 per cent stake in FiberCop, a joint venture with TIM and Italian internet provider Fastweb to provide fibre optic broadband across Italy.

The takeover proposal comes amid news reports that shareholders – the largest of which is France’s Vivendi – are putting pressure on TIM’s top management following disappointing company results. A spokesman for Vivendi had earlier denied it was in discussions with any funds.

Shares of Vivendi rose 2.71 per cent on the Milan bourse in morning trade.