Italy’s CDP plans improved offer for Telecom Italia’s fixed-line unit – Bloomberg

By Scott Kanowsky 

Investing.com — Shares in Telecom Italia (BIT:) gained on Tuesday after Bloomberg News reported that Italian state-owned lender CDP is planning to improve its offer for the carrier’s landline grid by about €2 billion (€1 = $1.0817).

The latest bid from CDP – short for Cassa Depositi e Prestiti – could now value the fixed network unit at over €20B, the Bloomberg report said, citing people familiar with the situation. However, these people flagged that no final decision has yet to be made and the terms of a possible offer may change, Bloomberg reported.

Earlier this month, TIM’s board called on CDP, as well as rival suitor KKR (NYSE:), to outline fresh proposals for the division by April 18.

CDP previously teamed up with Australian infrastructure fund Macquarie (ASX:) to put forward an initial plan that called for TIM’s network assets to be brought together with its smaller peer Open Fiber. CDP already has a 10% stake in TIM, while both CDP and Macquarie are investors in Open Fiber.

Meanwhile, KKR, a New York-based private equity firm that previously snapped up a stake in TIM’s fixed network, reportedly delivered a non-binding bid of up to €20B.

The competing offers for the grid come as TIM Chief Executive Officer Pietro Labriola looks to cut down on the size of the former national phone monopoly’s approximately €25B debt pile as part of a wider overhaul of the company.

Analysts at Bryan Garnier noted that while CDP’s raised offer improves the chances of an eventual deal being reached, its newest bid remains below the ambitions of TIM’s top investor Vivendi SA (EPA:). Media reports have suggested that the French media conglomerate wants to see a price tag of €31B for the grid in order to back any sale.