Italian state investment giant CDP and its partners are asking Telecom Italia (TIM) for an extension to put together an offer to buy its network assets.
CDP and its partners have asked for more time to clinch a deal to buy TIM’s network assets, according to a report in Reuters. The request will further delay a project to create a unified broadband champion on the Italian peninsula.
CDP’s multi-billion bid is part of a long-held plan to combine TIM’s fixed network assets with those of state-backed rival Open Fiber to create a single national network operator under CDP control. CDP, which holds a 10 percent stake in TIM, controls Open Fiber.
The potential network sale is also a key plank of the strategy set out by TIM Chief Executive Pietro Labriola to turn around the debt-laden former phone monopoly, whose stock is trading at record lows. Under a preliminary agreement sealed in May and sponsored by Italy’s outgoing government, CDP and TIM had aimed for a binding deal by the end of October.
The agreement was also signed by infrastructure funds Macquarie and KKR, which hold minority stakes in Open Fiber and TIM’s last-mile network respectively. But the initial timeline for a non-binding bid has been subject to multiple delays and negotiations have been further complicated by Italy’s national snap election last month.
The new Italian government takes a stand
CDP values Telecom Italia’s landline grid at €20 billion including debt, sources had previously said. Other sources pointed to a valuation range of €15 billion to €18 billion.
Political uncertainty further complicates matters. Nationalist party Brothers of Italy, which led the right-wing bloc that won the Sept ember 25 election, backs the creation of a unified network champion.
However, a party official has called on CDP to pursue the plan by taking over TIM, a move he argues would be cheaper for the state lender and offer more protection to TIM’s domestic workforce of more than 40,000 individuals.
Giorgia Meloni, the head of Brothers of Italy likely to become prime minister this month, has declined to give a specific view on CDP’s existing plans before taking office. “Any move on the single network plan has been frozen in wait for the new government”, a person familiar with the matter said.