By Elvira Pollina
MILAN (Reuters) -Telecom Italia has received a non-binding bid for a controlling stake in its fixed-line network from U.S. investment firm KKR, Italy’s biggest phone group said, adding its board would meet on Thursday to discuss the matter.
Telecom Italia (TIM) said the size of the stake KKR was bidding for was yet to be defined, but it would result in the U.S. firm taking control of a newly created company comprising TIM’s domestic landline network as well as a stake in submarine cable unit Sparkle.
KKR, which is already an investor in TIM’s network, had approached the group in late 2021 with a nonbinding takeover offer which TIM eventually rejected.
The network is TIM’s most prized asset and key to supporting the 25.5 billion-euro ($28 billion) debt load of the former monopoly, which is burning cash in its mature domestic market.
As Italy’s biggest telecoms infrastructure the network is deemed strategic by the government which can block unwanted interest under so-called golden powers rules.
Sources told Reuters on Wednesday KKR had informed the Rome government of its intention to submit an offer, which comes as state investor CDP studies its own bid for TIM’s grid.
The right-wing administration of Prime Minister Giorgia Meloni has repeatedly said it wants public ownership of the grid, whose value has been a bone of contention between CDP and TIM’s single biggest investor, France’s Vivendi.
On Saturday a source close to Vivendi said the media group would consider a possible 24 billion-euro offer for the network by CDP as “very far” from what it deems fair.
KKR has already invested 1.8 billion euros in the grid, securing a 37.5% stake in the group’s last-mile network.
At the end of last year, KKR held exploratory talks with government officials over a plan to partner with CDP or another state entity to buy 51% of TIM’s access network, people familiar with the matter told Reuters in December.
(Reporting by Elvira Pollina; writing by Valentina Za; editing by Jason Neely)
