Italy, KKR to ask for more time for Telecom Italia grid bid – ET Telecom

By Elvira Pollina and Giuseppe Fonte

MILAN: U.S. fund KKR and Italy’s Treasury are set to ask Telecom Italia (TIM) for more time to arrange a joint bid for its landline grid beyond a deadline of the end of September, three sources close to the matter said.

Economy Minister Giancarlo Giorgetti plans to meet the chief executive of top TIM investor Vivendi to discuss the deal, the sources added.

KKR last month secured the backing of Prime Minister Giorgia Meloni’s government, which authorised the Treasury to join its bid for the country’s main telecoms infrastructure, an asset deemed of strategic national interest.

The U.S. fund’s preliminary bid valued the business — dubbed NetCo — at around 23 billion euros ($25 billion) including debt and taking into account a number of variables.

The sale is a key plank in efforts by TIM CEO Pietro Labriola to reshape the former national telephone company, slashing a net debt pile of 26 billion euros.

It is the latest in a series of plans designed to secure a viable future for TIM, which employs more than 40,000 people in Italy.

In June, TIM granted KKR a period of exclusive talks until the end of September to submit a binding bid for NetCo, which is made up of TIM’s fixed access network and submarine cable unit Sparkle.

However, KKR and Italy’s Treasury are preparing a formal request to TIM to secure “a few extra weeks” to finalise the bid, the sources said on Wednesday, with one of them adding parties are discussing a two-week extension.

GREEN LIGHT NEEDED

The Treasury needs the green light of the national audit court for the plan to go ahead, two of the sources said, adding that this motivated the request for more time and that the court was expected to give its opinion in October.

TIM directors will discuss the request for a delay at a meeting scheduled on Sept. 27.

The Treasury also intends to seek assurances from the country’s Antitrust body that the deal does not harm competition, Reuters reported on Aug. 29.

Rome aims to get a minority stake for the ministry in NetCo worth a maximum 2.2 billion euros.

The backing of Vivendi is also key to securing a sale. The French group, which owns 24% of TIM, has so far shown little appetite for a deal under KKR’s terms.

Following a request by Vivendi Chief Executive Arnaud de Puyfontaine, Giorgetti accepted a meeting with the French group’s top executive, the people said.

The timing of the meeting was not yet known.