© Reuters. The Tim logo is seen at its headquarters in Rome, Italy, November 22, 2021. REUTERS/Yara Nardi
By Elvira Pollina and Giuseppe Fonte
MILAN (Reuters) – Italian public lender CDP said on Sunday its board had approved a non-binding bid for the former telephone monopoly’s landline network Telecom Italy (BIT:) (TIM), adding that it would be valid until March 31.
CDP has partnered with Australian infrastructure fund Macquarie to bid on all of Italy’s most important telecommunications infrastructure.
The joint bid targets TIM’s fixed network and submarine cable unit, Sparkle. The American investment company KKR has already submitted an offer to buy a majority stake in the same company.
TIM said its board would discuss the CDP-Macquarie offer on “March 15 or another date to be determined.”
In recent weeks, sources have told Reuters that CDP-Macquarie and KKR have both pegged an enterprise value of 18 billion euros ($19 billion) on TIM’s network.
CDP’s bid would also involve TIM’s smaller fiber optic network rival, Open Fiber, which is owned by CDP and Macquarie and would be integrated into TIM’s network later.
KKR’s proposal, which amounts to 20 billion euros including an additional price of 2 billion euros, has given new impetus to efforts to overhaul TIM after protracted talks involving the government and the two main shareholders of TIM – CDP and the French Vivendi (OTC: ).
Both figures are lower than the 31 billion euro price that Vivendi has set for reselling the network, for which TIM itself has indicated a valuation of 25 billion euros.
TIM said on February 24 that KKR’s proposal “does not fully reflect” the value of its asset and added that it would seek an improved offer by the end of this month.
The sale of the network to reduce TIM’s 25 billion euro debt and relieve half of its 40,000 domestic workers is one of the main elements of CEO Pietro Labriola’s desire to reshape the group.
Prime Minister Giorgia Meloni’s government has repeatedly said it wants to take 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 interests in strategically important assets such as TIM’s network.
CDP’s decision is welcome as it makes the sale process more transparent but still leaves several scenarios open, a senior government source said.
In its approach, KKR has left the door open for the involvement of a state-run entity as a minority shareholder in the TIM network, but it opposes CDP playing such a role in due to antitrust issues.
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