On Monday, Telecom Italia’s (TIM) shares increased by up to 5% following a joint bid submitted by Australian fund Macquarie and Italian state investor CDP for the former phone monopoly’s grid. This bid competes with an offer made by U.S. firm KKR.
TIM hopes to reduce its debt pile of 25 billion euros and fund a reorganization of its revenue-starved group by selling its most valuable asset.
Sources familiar with the matter stated that both bids valued TIM’s grid, which is Italy’s primary piece of
telecommunications infrastructure, at around 18 billion euros ($19.2 billion).
Broker Equita wrote in a research note that “the news is positive for TIM as a second approach increases its bargaining power.” However, regulatory issues may pose a challenge for the new bidders as CDP and Macquarie already own TIM’s smaller rival Open Fiber, and CDP owns a 10% stake in TIM.
Furthermore, both bids fall short of the 31 billion euro price sought by TIM’s top investor Vivendi, whose support is crucial for any deal to proceed.
($1 = 0.9398 euros)
