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MILAN (Reuters) – U.S. investment firm KKR (N:KKR) has agreed to extend its binding offer for a minority stake in Telecom Italia ‘s (MI:TLIT) secondary grid until end-August at the request of the Italian government, two sources close to the matter said on Tuesday.
One of the sources said that KKR agreed its deal for a stake in the so-called last-mile network should be part of a broader plan for a tie-up of TIM’s network assets with those of smaller state-controlled rival Open Fiber with the aim of building a national ultra-fast broadband champion.
TIM and Open Fiber, a wholesale-only broadband unit jointly controlled by government-controlled utility Enel (MI:ENEI) and state lender CDP, have been talking since June 2019 on ways of combining their assets, but negotiations have been fruitless so far.
In a bid to break the stalemate, Italian Economy Minister Roberto Gualtieri last month asked parties involved to agree on a memorandum of understanding (MOU) by the end of July but sources told Reuters more time was needed to strike a deal.
On Tuesday the prime minister’s office said Rome had no objection to KKR, adding it was in favour of including other institutional and market players in the broader deal.
Sources told Reuters last month that CDP, which also own a 10% stake in TIM, could invest in TIM’s last-mile network to allay Rome’s concerns over the planned sale of part of the grid to KKR.
Reuters wrote on July 27 that Rome drafted a plan under which any combined merger of TIM’s assets with Open Fiber could initially be majority owned by Telecom Italia but would grant equal access to all market players.
KKR declined to comment. TIM was not immediately available to comment.
