(Bloomberg) — KKR & Co. is open to exploring new deals with Telecom Italia SpA as alternatives to its original 10.8 billion-euro ($11.9 billion) full takeover proposal, according to a letter sent by the U.S. private equity firm late Monday.
“At present we are not able to reconfirm our proposed offer,” KKR said in the letter, which was seen by Bloomberg News. “We remain at your disposal to either complete due diligence on our proposed transaction, or explore any other transactions in the interest of the company, its shareholders and the country of Italy.”
Telecom Italia shares rose as much as 2.6%, reversing earlier losses, after Bloomberg reported earlier about a possible new plan from KKR. Representatives for Telecom Italia and KKR declined to comment on the letter.
Bloomberg reported last week that KKR would abandon a full takeover bid on Telecom Italia if it was unable to proceed with so-called due diligence to examine the company’s finances.
Single Network
With Chief Executive Officer Pietro Labriola already working on a plan that mirrors some aspects of KKR’s takeover proposal, Telecom Italia could now invite the private equity firm to join its in-house project. KKR is already a key investor in Telecom Italia’s FiberCop fiber unit, where it invested 1.8 billion euros about two years ago.
Read more: Telecom Italia Pushes KKR to End Bid, Join Spinoff Plan
Labriola’s strategy calls for landline assets to be merged with those of smaller, state-backed rival Open Fiber SpA, aligning Telecom Italia with a government goal of building a single national fiber network while avoiding duplicate investments.
As part of that plan, state lender Cassa Depositi e Prestiti SpA, Telecom Italia’s second-largest investor, would get a majority stake in the company’s fixed network assets, people familiar with the matter said earlier this year. Cassa Depositi, known as CDP, is also the controlling shareholder of Open Fiber.
Telecom Italia over the weekend confirmed that it signed a non-disclosure agreement with CDP to start preliminary discussions on integrating its network with that of Open Fiber. That deal is also open to KKR and other funds, two other people familiar with the matter said.
Separately, CVC Capital Partners last month made a non-binding offer for 49% of Telecom Italia’s new enterprise services unit. Telecom Italia plans to discuss CVC’s bid at a board meeting scheduled for April 7, after the company’s annual general meeting, people familiar with the matter said earlier.
(Updates with shares, company plan from third paragraph.)
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