Global Infrastructure Partners is among investors weighing a bid for a stake in Telecom Italia SpA’s multi-billion-euro network, in a move that would buttress Italy’s plan to build a state-controlled ultra-broadband grid, people familiar with the matter said.
(Bloomberg) — Global Infrastructure Partners is among investors weighing a bid for a stake in Telecom Italia SpA’s multi-billion-euro network, in a move that would buttress Italy’s plan to build a state-controlled ultra-broadband grid, people familiar with the matter said.
The New York-based investment firm could join forces with Italy’s state lender Cassa Depositi e Prestiti SpA and infrastructure fund KKR & Co. in a possible offer for the ex-phone monopolist’s network, said the people, asking not to be named discussing confidential deliberations.
Macquarie Group Ltd., already an investor in Telecom Italia’s smaller, state-backed rival Open Fiber SpA, could also be part of the deal, the people said.
The Italian government led by Prime Minister Giorgia Meloni has been looking for ways to gain control of Telecom Italia’s landline grid, which Rome deems to be of national strategic value.
The most likely scenario now would see Cassa Depositi taking the lead role in buying the network — an asset the carrier’s Chief Executive Officer Pietro Labriola had planned to spin off into a new company earlier this year — the people said. International funds including GIP could then get a minority stake in the grid, they said.
GIP’s considerations may not lead to an actual bid and there’s no certainty any transaction will materialize, given the political sensitivities around Telecom Italia, the people said.
A spokesman for Telecom Italia declined to comment. A representative for GIP was not immediately available for comment.
Read more: KKR Seeks Italy State Involvement for Telecom Italia Network
Time is short for debt-ridden Telecom Italia, as it’s under extreme pressure following European Central Bank moves to raise borrowing costs to tackle inflation.
More Control
Allowing Rome to gain control of the network would mesh with Telecom Italia’s goal of selling the grid — by far its most valuable asset — and using the proceeds to at least halve its €33 billion ($35 billion) gross debt pile.
That would also allow about half of the carrier’s roughly 40,000 employees to be moved to the new spun-off network company, the people said.
CEO Labriola made clear Wednesday at an event in Rome that the company needs to sell assets to cut its debt pile. Still, he dismissed any suggestions that the ex-monopolist is in financial trouble.
Government officials are on Thursday set to meet with Telecom Italia’s largest investor, French media conglomerate Vivendi SE, and Cassa Depositi, which owns about 10% of the company, the people said.
That same day former Poste Italiane SpA Chief Executive Officer Massimo Sarmi could be appointed as a Telecom Italia board member, they said.
Still, the grid’s value continues to be a sticking point, with Telecom Italia advisers assessing it at around €20 billion and Vivendi at €31 billion, people familiar with the matter said earlier this year.
Last month Rome said that it will continue to review its options for creating an efficient public telecoms network through the end of the year, signaling that the previous merger plan between Telecom Italia and Open Fiber has been put on hold at least for the moment.
–With assistance from Alessandra Migliaccio.
(Updates with CEO in 11th, 12th paragraphs.)
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