Italy may move to end a stalemate over the sale of Telecom Italia SpA’s landline network by backing a single bid which would see state lender Cassa Depositi e Prestiti SpA joining forces with KKR & Co Inc., which has already submitted a preliminary offer.
(Bloomberg) — Italy may move to end a stalemate over the sale of Telecom Italia SpA’s landline network by backing a single bid which would see state lender Cassa Depositi e Prestiti SpA joining forces with KKR & Co Inc., which has already submitted a preliminary offer.
Officials for Cassa Depositi, also known as CDP, may be ready to talk with KKR on a possible joint offer for the grid, which Telecom Italia has been trying to sell for months in order to cut its heavy debt pile, people familiar with the matter said.
Talks on a single bid would represent yet another twist in the drawn-out plan to spin off the carrier’s most valuable asset. CDP until late last week was working with Macquarie Group Ltd. on a counter-bid for the grid. A plan along those lines remains possible, said the people, asking not to be named discussing confidential deliberations.
A final decision hasn’t been made and discussions are ongoing, the people said. While the project could face further delays, the single-bid option would likely be favored by Prime Minister Giorgia Meloni’s government, they said.
Representatives for KKR, the Italian government, Cassa Depositi and Telecom Italia all declined to comment.
Non-Binding Bid
Cassa Depositi was expected to present an offer along with Macquarie for the network as soon as this week. That would have countered KKR’s non-binding €20 billion ($21.3 billion) bid in time for it to be discussed at a Telecom Italia board meeting Feb. 24, the people said.
Any decision by the carrier’s directors is now likely to be postponed, the people said.
Rome, which owns nearly 10% of the carrier through CDP, has signaled that Telecom Italia’s network is a strategic asset that must retain a level of public oversight, saying it favors the state lender’s involvement. The government can veto deals involving strategic assets, and its support is crucial for potential investors in Telecom Italia, a former monopoly that’s under pressure to cut debt amid rising interest rates.
Read more: KKR Bids for Telecom Italia Grid as Carrier Aims to Cut Debt
The state lender also controls the phone carrier’s smaller rival Open Fiber SpA, which could raise competition concerns at European Union level in the event of a single bid by CDP that led to a network merger. Still, remedies have already been included in a possible deal structure, people familiar with the matter said. Macquarie owns the remaining stake in Open Fiber.
KKR already owns a minority stake in Telecom Italia’s FiberCop unit. In 2021, the phone carrier rejected an offer from the US private equity fund to purchase the whole business for €10.8 billion.
–With assistance from Alessandra Migliaccio.
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