By Giuseppe Fonte and Elvira Pollina
ROME (Reuters) -Government officials will discuss plans for Telecom Italia (TIM) on Tuesday, Italy’s economy minister said, responding to a question about the former phone monopoly’s landline grid.
“We will hold a meeting on TIM within hours,” Economy Minister Giancarlo Giorgetti said during a press briefing in Rome on Tuesday morning.
Giorgetti was asked whether the new right-wing administration still backed Italian state lender Cassa Depositi e Prestiti’s (CDP) plans to submit an offer for TIM’s landline grid by the end of the month.
The minister reiterated that the government wants to retain control of TIM’s network which is deemed of strategic interest, adding such a goal can be reached in “several ways”.
Shares in Milan-listed TIM rose as much as 3%, extending early gains after Giorgetti’s comments. Still, the stock is trading close to an all-time record low.
CDP’s multi-billion euro preliminary offer for TIM’s landline grid is part of a plan to combine it with its broadband unit Open Fiber. The sale of TIM’s wholesale fixed network assets is also a key plank of a break-up strategy set out by CEO Pietro Labriola to revamp the group and cut its 25 billion euro ($25.7 billion) debt pile.
The offer is expected to give a value for TIM’s landline grid and submarine cable unit Sparkle of between 15 and 18 billion euros, including debt, sources have previously said. TIM has been in talks with CDP since May over a potential deal under a preliminary pact also signed by Macquarie and KKR, which own minority stakes in Open Fiber and TIM’s last-mile grid respectively.
Under such a scheme, sponsored by the previous government of Mario Draghi, Treasury-owned CDP would control the newly-created wholesale-only broadband company, which would assume half of Telecom Italia’s 40,000 domestic staff.
Giorgetti said the new-right government aimed to “find a solution in the interests of TIM” and its workers, while maintaining public control of the network.
Negotiations have been complicated by divergences on valuation, with TIM’s top investor Vivendi, demanding 31 billion euros to back a sale, a source close to the French media said. TIM is seeking a price tag of 25 billion euros.
Government officials within Giorgia Meloni’s administration have been weighing also other options to reach the goal, including a state-sponsored takeover of TIM.
($1 = 0.9732 euros)
(Editing by Federico Maccioni and Keith Weir)
