© Reuters. File Photo: Telecom Italia’s new logo is seen at its headquarters in the Rozzano district of Milan, Italy, on May 25, 2016. REUTERS/Stefano Rellandini
Elvira Polina
MILAN (Reuters) – Telecom Italia (TIM) shares rose on Monday after Italian state investor CDP and Australian fund Macquarie submitted a joint bid for the former telephone monopoly’s grid, rivaling US firm KKR’s approach. , rose 5%.
TIM is betting on the sale of its most valuable assets to reduce €25bn of debt and fund the review of the underperforming group.
Both provide €18 billion ($19.2 billion) in value to the grid of TIM, Italy’s main telecommunications infrastructure, according to sources familiar with the matter.
Broker Equita said in a research note, “This news is positive for TIM as the second approach is increasing its bargaining power.
Shares were up about 3.5% at €0.32 at 0900 GMT, the highest level since April last year.
The government, led by Prime Minister Giorgia Meloni, has repeatedly said it wants to gain control of TIM’s network while protecting jobs, but there is no common ground within the administration on how to achieve that goal.
CDP and Macquarie own TIM’s smaller rival Open Fiber, so regulatory issues remain a hurdle for new bidders. CDP also owns his 10% stake in his TIM.
TIM’s approach to the grid left KKR, which already owns a minority stake in the network of the former telephony monopoly, open to state-owned companies to get involved, but CDP is unlikely to play such a role. I am against it due to antitrust issues.
Both bids are below the €31 billion price tag sought by TIM’s top investor Vivendi (OTC:).
Evaluating KKR’s approach to €20bn including the earn-out mechanism, TIM said last month that the fund’s proposal “doesn’t fully reflect” the value of its assets, which had improved by the end of the month. He added that he would ask for suggestions.
($1 = 0.9398 EUR)