© Reuters. Tim’s logo is seen at his headquarters in Rome, Italy, November 22, 2021. REUTERS/Yara Nardi
By Elvira Pollina and Giuseppe Fonte
MILAN (Reuters) – The board of Italian state investor CDP will meet later on Sunday to approve a multi-billion-euro non-binding offer for the former telephone monopoly’s fixed network. Telecommunications Italy (BIT:), said three people with knowledge of the matter.
CDP has partnered with Australian infrastructure fund Macquarie to bid for Italy’s most important telecommunications infrastructure, for which US investment firm KKR has already submitted a bid.
One of the people familiar with the matter said CDP board members will meet at 3 pm (1400 GMT) to approve the offer.
In recent weeks, sources told Reuters that both CDP-Macquarie and KKR have set an enterprise value of 18 billion euros ($19 billion) for TIM’s network.
CDP’s offer would also involve Open Fiber, the smaller rival of TIM’s fiber optic network, which is owned by CDP and Macquarie and would be incorporated into TIM’s network in the future.
KKR’s proposal, which amounts to €20 billion if you include a €2 billion profit, has given new impetus to efforts to revamp TIM after protracted talks between the government and TIM’s two major shareholders failed. : CDP and the French Vivendi (OTC: ).
Both figures are below the reference price of 31,000 million euros that Vivendi has set to support the sale of the network, for which reason TIM itself has indicated a valuation of 25,000 million euros.
The sale of the network to reduce TIM’s 25 billion euro debt and get rid of half of its 40,000 domestic employees is one of the pillars of Chief Executive Pietro Labriola’s push to reshape the group.
Prime Minister Giorgia Meloni’s government has repeatedly said it wants to gain control of TIM’s network while protecting jobs, but there is no common ground within the administration on how to proceed.
Under Italian rules, Rome has the power to block unwanted interest in strategically important assets like TIM’s network.
CDP’s offer is welcome because it makes the sale process more transparent, a senior government source said, but it leaves several scenarios open.
In its approach, KKR has left the door open to involve a state entity as a minority shareholder in TIM’s network, but opposes CDP playing that role due to antitrust concerns.
($1 = 0.9406 euros)
