According to three sources close to the situation, the investment firm KKR from the United States and the Italian Treasury plan to ask Telecom Italia (TIM) for further time to coordinate a joint offer for the company’s landline grid.
KKR (KKR.N) successfully gained the government’s support last month, led by Prime Minister Giorgia Meloni. As a result, the government granted permission to the Treasury to participate in KKR’s offer for an asset of strategic national significance.
The preliminary offer made by the American fund valued the company, which was given the name NetCo, at approximately 23 billion euros ($25 billion), which included the debt and took into consideration several different elements.
TIM (TLIT.MI) allowed KKR a period of exclusive negotiations beginning in June and lasting through the end of September so that KKR could submit a binding proposal for NetCo. NetCo is comprised of TIM’s fixed access network as well as the submarine cable subsidiary Sparkle. TIM made this offer in June.
The sources stated on Wednesday that KKR and Italy’s Treasury are preparing a formal request to TIM to secure “a few extra weeks” to finalize the proposal. One of the sources said that the parties are negotiating a two-week extension.
According to two sources, the Treasury must first receive approval from the national audit court for the plan to be implemented. Because of this requirement, the Treasury has asked for further time, and the national audit court is scheduled to announce its verdict in October.
The directors of TIM will discuss the request for further time at a meeting that is scheduled to take place on September 27.
According to a story published on August 29 by Reuters, the Treasury Department plans to additionally seek guarantees from the country’s Antitrust Authority that the purchase does not impair competition.
Rome is working on acquiring a minority ownership in NetCo for the ministry that may be valued at up to 2.2 billion euros.
The support of TIM’s most important investor, Vivendi (VIV.PA), is also essential to ensure a successful sale. The French group, which now owns 24% of TIM, has not shown much interest in a sale under the terms proposed by KKR aet.
According to many sources, the Chief Executive Officer of Vivendi, Arnaud de Puyfontaine, has requested a meeting to discuss the agreement with senior advisers to the Minister of the Economy, Giancarlo Giorgetti.
According to one of these persons, the Treasury is now examining the request, but they did not provide further details.