MILAN — Telecom Italia (TIM) said on Saturday it had signed a non-disclosure agreement with Italian state lender CDP to start talks on potentially combining the phone group’s network with that of smaller broadband rival Open Fiber.
The move comes as TIM boss Pietro Labriola presses ahead with a plan to revamp Italy’s biggest phone company centered around a split of its wholesale network operations from its service business.
Rome has been keen to merge TIM’s fixed assets with those of Open Fiber to avoid costly duplication of investment needed to upgrade the national network, but a deal has proven elusive so far due to antitrust issues.
The purpose of Saturday’s agreement and the planned talks is to agree, potentially by April 30, a memorandum of understanding to define the objectives, structure and main evaluation criteria for the integration project, TIM said.
Open Fiber is 60% owned by CDP, with the remainder held by Australian fund Macquarie. CDP also owns 10% of TIM.
The TIM-Open Fiber talks make it less likely that separate discussions with KKR on the U.S. fund’s takeover approach for all of TIM will proceed.
TIM left the New York-based fund waiting for nearly four months without an answer before agreeing in March to engage in talks, while pressing ahead with its standalone reorganization to unlock what the group calls its “untapped value.”
Sources have said TIM has asked KKR to clarify by Monday whether the price of its 10.8 billion euro non-binding bid it submitted in November is still valid.
Sources have said TIM might agree a compromise with KKR by involving the fund in its plans for the Open Fiber tie-up. KKR already owns a 37.5% stake in TIM’s last-mile network. (Reporting by Agnieszka Flak Editing by Alison Williams and Mark Potter)
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