Italian state lender, Macquarie bid for Telecom Italia Grid

Italy’s state lender and Macquarie Group Ltd. made an offer for Telecom Italia SpA’s landline network, setting up a multi-billion-euro takeover battle with KKR & Co.

In a statement late Sunday, Cassa Depositi e Prestiti SpA said its board approved the bid for Telecom Italia’s grid and its submarine cable business, Sparkle. No terms were given.

The bid matches KKR’s €20 billion ($22 billion) valuation for the network, but offers more in cash, people familiar with the matter said. CDP and Macquarie decided to go head to head with KKR after initially exploring a joint offer with the US investment firm, the people said.

Government support is crucial for any potential investor in Telecom Italia, a former state monopoly under pressure to slash a 20 billion-euro debt load. CDP owns almost 10% of Telecom Italia and has a majority stake in smaller rival Open Fiber SpA. Prime Minister Giorgia Meloni has signaled that she considers Telecom Italia’s network a strategic asset that must remain under public oversight.

Italy’s government retains the right to veto deals involving assets deemed to be of strategic value, and Rome’s desire to safeguard the 40,000 jobs at the company means any offer without state backing would face significant hurdles.

The offer will be subject to the preliminary examination of Telecom Italia’s so-called “related parties committee” and possibly reviewed at a board meeting scheduled for March 15 or at another date to be defined, Telecom Italia said in a statement. The offer expires March 31.

Bloomberg News reported Saturday that CDP and Macquarie were nearing an offer for the grid.

Telecom Italia said last month that it was seeking better terms from KKR by March 31, after a preliminary review of the non-binding offer. In 2021 the phone carrier rejected an approach from the US firm for the entire company.

The CDP-Macquarie offer meshes with the government’s goal of building a single national network through a merger of Telecom Italia and Open Fiber, and promises to preserve a strategic asset and accelerate the country’s digitalization, according to people familiar with the matter. Bloomberg