(Reuters) – Telecom Italia (TIM) said on Thursday it would give suitors for its fixed network until June 9 to improve further their multibillion euros bids for the former phone monopoly’s landline grid, in a final round of offers.
TIM directors gathered on Thursday to draw a response to rival non binding approaches for its grid by KKR and a consortium comprising state lender CDP and fund Macquarie, worth, respectively, 21 billion euros ($23.13 billion) and 19.3 billion euros.
In a statement after the board meeting, TIM said it deemed the bids “not yet adequate”.
It added that at least one of the bidders wants to improve its non-binding offer, due to which the board has decided to extend the time given to bidders to make a final offer.
The sale of TIM’s fixed network and its submarine cable unit Sparkle is the focus of CEO Pietro Labriola’s plan to slash the company’s 25 billion euros of debt and revive its struggling domestic business.
KKR’s bid is seen as the stronger alternative on the back of a significant effort to improve the detailed terms of its offer beyond the headline figure, according to sources in TIM’s camp.
However, both approaches for TIM’s most valuable asset remain a long way below the 31 billion euros sought by Telecom Italia’s top investor Vivendi, which is calling on TIM to draw a line under the bidding process, given the yawning gap to what it thinks should be paid.
The French media giant, which owns a 23.8% stake in TIM, in the past months relinquished its seats on the board and is calling for changes to how the group is run as it aims to negotiate an alternative plan with the Italian government.
For her part, Prime Minister Giorgia Meloni last month said her right-wing administration will not intervene at this stage in the network sale process, although it is on alert to avoid any risk to the national interest.
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(Reporting by Elvira Pollina and; Juby Babu, Editing by Franklin Paul and David Gregorio)
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