Telecom Italia (TIM) shares rose as much as 5% today after Italian state investor CDP and Australian fund Macquarie submitted a joint bid for the former phone monopoly's grid, rivalling an approach by US firm KKR.
TIM is betting on a sale of its most prized asset to cut its €25 billion debt pile and fund an overhaul of the revenue-starved group.
Both offers value TIM's grid, which is Italy's main piece of telecoms infrastructure, in the region of €18 billion, sources familiar with the matter said.
"The news is positive for TIM as a second approach increases its bargaining power," broker Equita wrote in a research note.
The government of Prime Minister Giorgia Meloni has repeatedly said it wants to win control of TIM's network while protecting jobs, but there is no common ground within the administration on how to reach that goal.
Regulation issues remain a hurdle for the new bidders, as CDP and Macquarie own TIM'smaller rival Open Fiber. CDP owns also a 10% stake in TIM.
In its approach for TIM's grid, KKR, which already owns a minority stake in the former phone monopoly's network, left the door open to involving a state-run entity, but it opposes CDP playing such a role due to antitrust issues.
Both bids are below the €31 billion price tag sought by TIM's top investor Vivendi, whose support is key for any deal to go through.
Assessing KKR's approach, which rises to €20 billion when including an earnout mechanism, TIM said last month the fund proposal "does not fully reflect" the value of its asset and added it would seek an improved offer by the end of this month.
