MILAN (Reuters) -The head of Telecom Italia (TIM) said on Thursday he was confident of clinching a preliminary agreement to merge Italy’s biggest phone group’s network assets with those of rival Open Fiber within days. The debt laden former phone monopoly is working on an overhaul centred around a split of its services businesses from […]
MILAN (Reuters) -The head of Telecom Italia (TIM) said on Thursday he was confident of clinching a preliminary agreement to merge Italy’s biggest phone group’s network assets with those of rival Open Fiber within days.
The debt laden former phone monopoly is working on an overhaul centred around a split of its services businesses from its wholesale network operations after ending talks last month on a takeover approach from U.S. fund KKR.
As part of the break-up plan, TIM has started talks with state lender CDP to revive a long-mooted project to combine its fixed network assets with those of broadband rival Open Fiber.
“There have been some delays… but stakeholders are interested in carrying out the project, I don’t see problems,” CEO Pietro Labriola said during a briefing with journalists after first quarter results.
CDP owns 60% of Open Fiber and 10% of TIM. To ensure state oversight of a strategic asset it would have full control of any combined network entity.
Labriola said funds KKR and Macquarie, which hold minority stakes in TIM’s grid and in Open Fiber respectively, are also involved in discussions.
Labriola, who took the helm at TIM in January, said besides CVC Capital Partners, which made a 6 billion euro approach to buy into TIM’s enterprise service arm, other funds have expressed interest in investing in TIM assets.
But he also said he aims to flesh out details of his own turnaround plan, to be presented at a Capital Markets Day in July, before assessing which partners would best fit with it
Telecom Italia shares were down around 0.6% at 0900 GMT after the company reported a 16% drop in its core profit in the first quarter, hit by weakness in its hyper competitive domestic market.
TIM stuck to a full-year forecast of a ‘mid to high teens’ drop in core profit, after posting a 2021 net loss of 8.4 billion euros.
(Reporting by Elvira PollinaEditing by Keith Weir)
