Telecom Italia SpA is close to entering into detailed negotiations with KKR & Co. over the sale of its network in a deal valued as much as €23 billion ($25 billion), according to people familiar with the matter.
(Bloomberg) — Telecom Italia SpA is close to entering into detailed negotiations with KKR & Co. over the sale of its network in a deal valued as much as €23 billion ($25 billion), according to people familiar with the matter.
The offer by the US firm is seen by the Italian company as more appealing than a rival one by Italy’s state lender Cassa Depositi e Prestiti, which would likely face antitrust issues, the people said, asking not to be identified discussing private topics. Still, the board could leave a door open to other bids, they said.
Telecom Italia said in a statement late on Monday that it was reviewing both offers and expects to complete its review on Thursday. No final decision has been taken, the company said. Reuters reported earlier that KKR was seen as the favorite bidder.
Telecom Italia shares rose as much as 2.8% in Milan on Tuesday and were up 2.2% as of 9:29 a.m., giving the company a market value of €5.69 billion.
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Earlier this month KKR raised its bid for Telecom’s landline network, giving the US firm an edge over Cassa Depositi, the people said.
The sale of Telecom Italia’s most valuable asset has become more urgent in the past year amid mounting pressure to slash €30 billion of gross debt as interest rates rise. Italian Prime Minister Giorgia Meloni’s administration has taken an active role on the deal, but officials remain split on the best structure to guarantee public oversight of the network while also protecting thousands of jobs.
–With assistance from Chiara Remondini.
(Updates with shares in fourth paragraph, context in sixth.)
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