Italy’s state-backed lender is leaning toward postponing its offer for Telecom Italia SpA’s network until after elections on Sept. 25, according to a person familiar with the matter.
(Bloomberg) — Italy’s state-backed lender is leaning toward postponing its offer for Telecom Italia SpA’s network until after elections on Sept. 25, according to a person familiar with the matter.
Cassa Depositi e Prestiti SpA was expected to make its bid around mid-September. While preparatory work for the offer will be completed by then, political uncertainty surrounding the vote suggests that a delay is appropriate, the person said, asking not to be named discussing confidential deliberations.
Mario Draghi’s government has been discussing for months a potential merger between the former phone monopolist’s ultra-broadband network and its smaller, state-backed rival Open Fiber SpA. The aim is to create a national single network and avoid duplicating investments.
But the ongoing electoral campaign has called the plan into question. The government’s decision to go ahead with the sale of the state carrier to a group of international investors became a political hot potato.
Read More: Draghi’s ITA Plan Becomes Political Fodder for Italian Election
Giorgia Meloni, the frontrunner to succeed Draghi according to the latest polls, may propose a different deal once in office, people familiar with the matter told Bloomberg last month.
Complex deal
Separately, Telecom Italia’s largest investor Vivendi SE has complained about a potential conflict of interest involving Cassa Depositi’s role in the sale. The state-backed lender owns almost 10% of Telecom Italia and also controls Open Fiber.
Vivendi wrote a letter to Telecom Italia saying Cassa Depositi Chairman Giovanni Gorno Tempini should at some point leave the board of the phone carrier, according to people familiar with the matter. Telecom Italia has scheduled a board meeting at the end of the month to review Vivendi’s governance request among other topics, the people said.
Spokespeople for Vivendi, Cassa Depositi and Telecom Italia declined to comment on the postponement of the offer as well as on Vivendi’s letter. Sole 24 Ore and MF reported about the bid delay first.
Telecom Italia is currently trying to speed up a turnaround plan that will lead to ceding control of its network. In July, the company’s board told Chief Executive Officer Pietro Labriola to give up control of the grid and cut over 30 billion euros ($29.8 billion) in gross debt by breaking up the phone carrier into several units and finding new partners.
Labriola is planning to sell a controlling stake in the phone company’s grid to a group of investors led by Cassa Depositi, KKR & CO. and Macquarie Group Ltd., and then merging it with Open Fiber.
A major sticking points is Telecom Italia’s most valuable asset, the landline network, which the French company values at up to 34 billion euros. Telecom Italia’s advisers initially estimated it at around 20 billion euros, people familiar with the matter said earlier this year. The deadline for the agreement was set for Oct. 31.
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