After many delays, the Italian Caisse des dépôts (CDP) ended up launching an offer this Sunday to take over 100% of Telecom Italia’s fixed network, which the nationalist government of Giorgia Meloni wants to put under public control. This offer competes with that of the US investment fund KKR, which presented a proposal at the beginning of February to buy a majority stake in the fixed network, valuing it at more than 20,000 million euros.
“The board of directors has given the green light to the presentation of a non-binding offer” to acquire the future company of Telecom Italia grouping its fixed network and submarine cables, indicates the CDP in a brief press release. “The offer will be valid until March 31,” adds the bank, 82.7% controlled by the Italian State, without disclosing its amount. The offer was launched in conjunction with Australian investment company Macquarie.
Telecom Italia confirmed after having received an offer from CDP, which it intends to examine at its next board meeting scheduled for March 15 or “at another date to be defined.” From a source familiar with the matter, CDP’s bid outbids KKR’s. In the name of the national interest and the defense of employment, the Meloni government has multiplied interventions in sectors considered strategic, including telecommunications, since it took office in October 2022.
“A strategic asset”
Giorgia Meloni has repeatedly stated her goal of creating “a national network under public control” and preserving jobs within the telecommunications group. Listed on the stock exchange, Telecom Italia is “a strategic asset with clear implications in terms of security,” Business Minister Adolfo Urso commented in early March.
The transfer of the network should allow Telecom Italia to reduce its huge debt, which at the end of December amounted to 25.4 billion euros. Its general director, Pietro Labriola, presented in June 2022 a strategic plan focused on the split between the fixed telephone network, put up for sale, and service activities.
Telecom Italia’s board of directors had asked KKR at the end of February to revise its offer upwards, setting the deadline for a new proposal at March 31. Its offer is “thankful, but could be improved,” decided the Italian group, which has always said that it is willing to “consider other alternative options.” French media giant Vivendi, Telecom Italia’s main shareholder with a 23.75% stake, had set the bar high, claiming a valuation of 31 billion euros.
KKR is already a 37.5% shareholder of FiberCop, the network operator of Telecom Italia, a stake for which the fund had disbursed 1.8 billion euros in 2021. The Italian State is the second largest shareholder of Telecom Italia, with a 9.81% stake held by CDP. In any case, the government will have the floor because it has special powers (“golden power”) in strategic sectors such as telecommunications.
Blocking a procurement project
Rome blocked a first plan to buy CDP from the TIM network in November, effectively suspending the preliminary agreement to that effect concluded in May 2022 between the public bank and Telecom Italia. This agreement, negotiated under the auspices of the previous government of Mario Draghi, provided for the merger of TIM’s network with that of its competitor Open Fiber, in which CDP and Macquarie have 60% and 40% respectively.
The stated objective of such a merger was to accelerate the development of high and very high speed Internet on the peninsula, which lags behind in terms of the fixed network. A merger would also make it possible to avoid duplication of investments, which are extremely expensive in this area, but which could raise doubts for the European competition authorities.
Vivendi’s reaction to the CDP offer remains to be seen. Its president of the board, Arnaud de Puyfontaine, had closed the door to the board of directors of Telecom Italia in mid-January. He wanted to give himself more leeway in negotiations with the government over the future of the telecom operator’s network.
Source: BFM TV
