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MILAN: Telecom Italia<\/a> has received a multi-billion euro bid for a controlling stake in its fixed-line network from U.S. fund KKR<\/a>, Italy's biggest phone group said, adding its board would meet on Thursday to discuss the matter.
Telecom Italia (TIM<\/a>) said the size of the stake that KKR was seeking was yet to be defined, but the move would result in the U.S. firm taking control of a newly created company comprising TIM's domestic landline network as well as a stake in submarine cable unit Sparkle<\/a>.
TIM did not disclose the value of the non-binding bid but a source familiar with the matter said it valued the infrastructure in the region of 20 billion euros ($22 billion).
TIM shares rose as much a 14% in early trading.
KKR, which is already an investor in TIM's network, made a non-binding takeover offer for the group as a whole late in 2021 which TIM eventually rejected.
The network is TIM's most prized asset and key to supporting the 25.5 billion-euro debt load of the former monopoly, which is burning cash in its mature domestic market.
Ceding control of the network to cut debt is a key plank of TIM Chief Executive Pietro Labriola's strategy to revamp the former phone monopoly.
But valuation has proved a stumbling block, with leading TIM investor Vivendi<\/a> determined to extract a full price.
STRATEGIC ASSET
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As Italy's biggest piece of telecoms backbone, the network is deemed strategic by the government which can block unwanted interest under so-called golden powers rules.
\"The government sees the safeguarding of employment levels and the security of a strategic infrastructure such as the national telecommunications network as key issues\", the industry<\/a> ministry said in a statement.
Sources told Reuters on Wednesday KKR had informed the Rome government of its intention to submit an offer, which comes as state investor CDP<\/a> studies its own bid for TIM's grid.
The right-wing administration of Prime Minister Giorgia Meloni has repeatedly said it wants public ownership of the grid, whose value has been a bone of contention between CDP and Vivendi.
But government-sponsored talks involving CDP and Vivendi have proved fruitless.
On Saturday a source close to Vivendi said the media group would consider a possible 24 billion-euro offer for the network by CDP as \"very far\" from what it deems fair.
KKR has already invested 1.8 billion euros in the grid, securing a 37.5% stake in the group's last-mile network.
At the end of last year, KKR held exploratory talks with government officials over a plan to partner with CDP or another state entity to buy 51% of TIM's access network, people familiar with the matter told Reuters in December.
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