Italian state lender CDP prepares TIM network bid following national vote

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

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MILAN, Sept 27 (Reuters) – Italian state lender CDP is preparing a preliminary offer for Telecom Italia’s fixed line network, the company said on Tuesday, while it announced plans to create a single broadband company with Open Fiber after Sunday’s general election pushes.

“We are working closely with our partners to complete the asset valuation process in accordance with the MoU signed on May 29,” CDP said in a statement.

CDP is now expected to make a non-binding offer in the first half of October, two sources familiar with the matter said, while cautionary deliberations are ongoing.

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TIM (TLIT.MI) and CDP entered into a preliminary agreement in May aimed at creating a unified broadband champion combining TIM’s assets with those of Open Fiber under CDP control.

That was part of a plan sponsored by the outgoing government, led by Mario Draghi, to help improve broadband coverage and speeds across the country and avoid duplication of investment.

According to the preliminary agreement sealed in May, CDP and TIM are aiming for a binding agreement by the end of October.

But differences in asset values ​​and political uncertainty surrounding the snap election have delayed the non-binding offer on multiple occasions.

TIM’s top investor Vivendi (VIV.PA) is targeting a €31 billion valuation to support a sale of the power grid, a source familiar with the French media group said.

CDP, which owns a 10% stake in TIM and also controls Open Fiber, values ​​Telecom Italia’s fixed-line network at around €20 billion, including debt, two sources familiar with the matter said, warning talks are still ongoing.

Other sources pointed to a range of 15 to 18 billion euros. CDP declined to comment on the valuations and the timing of the offer.

The nationalist Brothers of Italy party, which led the right-wing bloc that won the election, supports the creation of a unified network champion but has urged the CDP to go ahead with the plan by acquiring TIM.

A new government, likely to be led by Giorgia Meloni, leader of the Friars of Italy, is due to be installed towards the end of next month.

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Reporting by Elvira Pollina Editing by Keith Weir

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