MILAN Reuters -- Telecom Italia TIM is looking to draw up a list of candidates Friday to advise it on a takeover approach by U.S. group KKR as banks jockey for a position in Europe's biggest private equity deal.
Italy's biggest phone group has divisions that make it hard 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.
After a shareholder row a week ago, tensions are still running high after Luigi Gubitosi stepped down as CEO after a clash with the group's top investor Vivendi and independent board members.
In last week's drama, TIM placed the 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 November 21.
The board has a disagreement on key issues and top management is in limbo.
Two people close to the matter said that the Vivendi representative and other board members are pushing for a full board reshuffle after Gubitosi refused to 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 will succeed, given all the upheaval, one of the sources said.
KKR - which industry sources said is working with Citi, Morgan Stanley and JP Morgan - has said any deal is conditional on support from the Italian government and 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 that.
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, but they added that the situation was uncertain.
The sources said that Rothschild and Lazard are now squaring off for a role with TIM.
KKR's non-binding offer is dependent on a four-week due diligence, which will need a green light from TIM. There is no special board meeting called to date ahead of a scheduled regular meeting on December 17. $1 0.8823 euros