Board of Italy’s CDP meets Sunday over bid for Telecom Italia grid

Giuseppe Fonte and Elvira Pollina

MILAN (Reuters). -The Italian state investor CDP called a meeting of the board on Sunday. The goal is to approve a non-binding, long-delayed offer for fixed networks from Telecom Italia’s former phone monopoly Telecom Italia. Three sources familiar with the matter stated that the decision was expected to be approved.

CDP and Macquarie, an infrastructure fund in Australia, have teamed up to offer Italy’s top telecommunications infrastructure. This would be similar to the one offered by KKR (U.S. Investment Firm).

Recent reports have indicated that sources told Reuters CDP and Macquarie are ready to estimate TIM’s grid value at approximately 18 billion Euros ($19 billion), which includes 6 billion euro of debt.

According to the same sources: The offer could also include Telecom Italia’s small rival Open Fiber. CDP, Macquarie and Macquarie would co-invest in it.

Following long negotiations between the government and TIM’s largest shareholders, CDP, and France’s Vivendi which failed to produce any results, KKR’s proposal valued TIM’s grid as a value of around 20 billion Euros including debt, and gave fresh energy to efforts to revive ailing TIM.

Pietro Labriola is the CEO and a major proponent of the Group’s revival. This includes ceding grid control to pay off a 25 Billion Euro debt pile, as well as exchanging half of TIMs 40,000 staff.

Giorgia Melonsi, Prime Minister of Italy has stated repeatedly that her government is determined to take control over TIM’s network infrastructure and protect jobs. However, there are no clear guidelines within her administration on how to achieve this goal.

Two government officials stated that the offer by Macquarie and CDP leaves many options open. They did not elaborate.

Vivendi has placed a price of 31 billion Euro on TIM’s most important asset, which is necessary to make any deal happen.

TIM said KKR has already proposed “does not fully reflect” The asset was valued at $2.5 million and the company stated it will seek an improvement offer before the month ends.

KKR’s non-binding offer to TIM for a controlling share in TIM’s grid has been open to a state-run entity being a minor shareholder. However, CDP is opposed to such a role because of antitrust concerns, sources claimed.

Mario Draghi, Giuseppe Conte and Giuseppe Conte were Meloni’s forefathers. However, regulations and valuations have hampered efforts to merge TIM’s Grids with Open Fiber’s.

($1=0.9406 euros)

(Reporting by Elvira pollina, Giuseppe Fonte and Valentina Za; Writing and Editing done by Valentina Za and David Holmes; Louise Heavens edited).