TIM board to meet on Friday over request to extend network deal deadline

Telecom Italia’s directors are set to meet on Friday over a request from state lender CDP and its partners to extend a deadline to clinch a deal over the Italian phone group’s network, two sources close to the matter said.

CDP, infrastructure fund Macquarie and Open Fiber have asked for more time to negotiate a deal to buy TIM’s network assets, pushing back an initial deadline for a binding deal set at the end of this month.

The potential multi-billion euro bid is part of a long-held plan to combine TIM’s fixed network assets with those of smaller rival Open Fiber to create a single national network operator under CDP’s control.

Treasury-owned CDP, which holds a 10% stake in TIM, controls Open Fiber.

The initial timeline for a non-binding bid has been subject to multiple delays and has been further complicated by a snap national election last month.

Divergences on valuations have also been a stumbling block, with TIM’s top investor Vivendi seeking 31 billion euros to back a deal, some 10 billion-15 billion above CDP’s valuation, sources have said.

Earlier this week TIM Chief Executive Pietro Labriola met CDP’s head Dario Scannapieco to discuss a new timetable, the sources said.

The new time-limit for a preliminary offer could be set at year-end with the prospect to finalise a binding deal in the first quarter, said one of the sources, cautioning deliberations are still ongoing.

Sponsored by the outgoing government of Mario Draghi, CDP’s plans to create a single broadband network champion will now have to be reviewed by a new right-wing government which is due to be installed later this month.

The preliminary agreement was signed also by infrastructure funds Macquarie and KKR, which hold minority stakes in Open Fiber and TIM’s last-mile network respectively.

The grid sale is a key plank of the strategy set by Labriola to turn around the debt-laden former phone monopoly, whose shares hit a record low on Thursday. Reuters