CDP executives to consider multibillion-dollar offer for Telecom Italia
2023.03.05 12:54
CDP executives to consider multibillion-dollar offer for Telecom Italia
By Tiffany Smith
Budrigannews.com – A multi-billion euro non-binding offer for Telecom Italia’s fixed network is expected to be approved by the board of Italian state investor CDP later on Sunday (BIT:). Three people who are familiar with the situation said.
To compete for Italy’s most important telecommunications infrastructure, CDP and Australian infrastructure fund Macquarie have joined forces. KKR, a US investment firm, has already made an offer for it.
According to a person with knowledge of the situation, members of the CDP board were scheduled to meet at 3 p.m. (1400 GMT) to approve the offer.
Sources have informed Reuters that CDP-Macquarie and KKR have both established an enterprise value for TIM’s grid of 18 billion euros, or 19 billion dollars.
Open Fiber, TIM’s smaller rival with a fiber-optic network, is owned by CDP and Macquarie and would eventually be incorporated into TIM’s grid as part of CDP’s offer.
After the failure of prolonged talks involving the government and TIM’s top two shareholders, CDP and France’s Vivendi (OTC:), KKR’s proposal, which includes a 2 billion euro earn-out, has given efforts to revamp TIM fresh impetus.
The two figures are beneath the 31 billion euro sticker price Vivendi has set to back selling the lattice, for which TIM itself has shown a valuation of 25 billion euros.
One of the main pillars of CEO Pietro Labriola’s efforts to reshape the company is the sale of the grid in order to reduce TIM’s 25 billion euro debt and shed half of its 40,000 domestic employees.
While Prime Minister Giorgia Meloni’s government has repeatedly stated that it wants to maintain employment while also gaining control of TIM’s network, there is no consensus within the administration regarding the best course of action.
Rome has the authority to prevent unwelcome interest in strategic assets like TIM’s grid under Italian law.
A senior government source stated that, while CDP’s bid makes the sale process more transparent, it leaves several possibilities open.
KKR has left the door open for a state-run organization to become a minority shareholder in TIM’s grid, but it opposes CDP’s participation due to antitrust concerns.
