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TIM drops exclusivity in extended talks with CDP over network

Telecom Italia decided on Friday to give Italian state lender CDP and its partners until Nov. 30 to submit a non-binding offer for the former monopoly’s landline grid, two sources with knowledge of the matter said.

Talks between TIM, Italy’s biggest telecoms group, and CDP will continue on a non-exclusive basis, the people added.

CDP, fibre optic firm Open Fiber and infrastructure fund Macquarie had requested more time to negotiate a deal to buy TIM’s network assets, seeking to extend an initial deadline that ran out at the end of October for a binding agreement.

Sources familiar with the matter had told Reuters that TIM’s top investor Vivendi (VIV.PA) had some reservations about continuing exclusive talks with CDP on the network sale.

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 unified broadband operator under CDP’s control.

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

The grid sale is also a key plank of TIM CEO Pietro Labriola’s strategy to turn around the debt-laden former phone monopoly.

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

Divergences on valuations have also been a stumbling block in negotiations, with Vivendi seeking 31 billion euros ($30.89 billion) to back a deal, at least 10 billion above CDP’s valuation, sources have said.

Analysts say removing the exclusivity granted to CDP and partners could allow rival bidders to enter the fray and drive up the price.

The Brothers of Italy party, which leads the new Italian coalition government, backs the creation of a wholesale-only unified network operator.

In her inaugural speech to Parliament, new Prime Minister Giorgia Meloni vowed to ensure national strategic networks were state-owned while enabling telecoms companies to compete on services.

Rome has special anti-takeover powers to shield companies deemed of strategic importance from foreign interest. It could use these to stop any deal for TIM’s network. Reuters

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