Italian state lender CDP prepares bid for TIM network after national vote

The Telecom Italia (TIM) logo is seen in this image from May 3, 2022. REUTERS/Dado Ruvic/Illustration

MILAN, Sept 27 (Reuters) – Italian state lender CDP is making a preliminary bid for Telecom Italia’s fixed-line network, the company announced on Tuesday, as it moves on with plans to form a single broadband business with Open Fiber following Sunday’s parliamentary elections.

CDP stated in a statement, “We are working closely with our partners to complete the asset appraisal process in line with the memorandum of agreement reached on May 29.”

According to two individuals with knowledge of the situation, CDP is anticipated to present a non-binding offer in the first part of October, with the caveat that negotiations are ongoing.

In May, TIM (TLIT.MI) and CDP announced a preliminary agreement to create a unified broadband champion by combining TIM’s assets with those of Open Fiber, which is controlled by CDP.

This was part of a strategy endorsed by the departing administration led by Mario Draghi to increase internet coverage and speeds across the nation without duplicating investments.

According to the May preliminary agreement, CDP and TIM aimed to reach a legally binding deal by the end of October.

However, disparities in asset valuations and political unpredictability resulting from snap elections have resulted in several delays to the non-binding proposal.

TIM’s primary investor Vivendi (VIV.PA) is seeking a €31 billion value to support the sale of the network, according to a person with knowledge of the French media conglomerate.

CDP, which holds a 10% interest in TIM and also runs Open Fiber, values Telecom Italia’s fixed-line network in the region at 20 billion euros, including debt, according to two individuals with knowledge of the situation who cautioned that negotiations are ongoing.

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According to some estimates, the range is between 15 and 18 billion euros. The CDP declined to comment on values and the offer’s timing.

The nationalist Brothers of Italy party, which headed the winning right-wing coalition, supports the development of a single network but has urged the CDP to follow forward with the plan and acquire TIM.

Late next month, a new administration, possibly led by Giorgia Meloni, the leader of the Brothers of Italy, is anticipated to be installed.

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