New PM backs the creation of national champion
The Italian national investment bank Cassa Depositi e Prestiti (CDP) has announced that it’s preparing a preliminary offer for the landline grid owned by Telecom Italia (TIM), as it presses ahead with plans to create a single broadband company with Open Fiber after Italy’s general election on Sunday, Reuters has reported. “We are strictly working with our partners to finalize the valuation process of the assets in accordance with the memorandum of understanding entered into on May 29,” CDP said in a statement. CDP is now expected to submit a non-binding offer in the first half of October, two different sources have said.
TIM and CDP reached a preliminary agreement in May aimed at creating a unified broadband champion merging TIM’s assets with those of another state-backed entity, rival broadband firm Open Fiber, with the combination coming under CDP control. That was part of a plan sponsored by the outgoing government led by Mario Draghi and was intended to help improve broadband coverage and speeds across the country, avoiding a duplication of investment.
Under the preliminary agreement sealed in May, CDP and TIM aimed for a binding deal by the end of October 2022. However, differences of opinion arose regarding the value of assets and political uncertainty linked to the snap election have caused multiple delays to the non-binding offer.
TIM’s top investor Vivendi expected a valuation of €31 billion euros to back a sale of the grid, insiders said. CDP, which owns a 10% stake in TIM and also controls Open Fiber, values Telecom Italia’s landline grid at around €20 billion including debt, according to two Reuters sources involved. Heated discussions have continued since some parties think the true value is closer to €15-18 billion.
The Brothers of Italy, the political bloc that won the election, backs the creation of a unified network champion but has called on CDP to pursue the plan by taking over TIM. The new government led by Giorgia Meloni is expected to be installed around the end of next month.