U.S. fund KKR & Co (NYSE:KKR) Inc has extended a non-binding offer for Telecom Italia (BIT:TLIT)’s (TIM) prized landline grid by four weeks to March 24 following a government request, Italy’s biggest phone group said late on Tuesday.
TIM said the extension of the deadline is due to a request by the Italian government to have an additional four weeks to carry out an analysis of the “public aspects” of the deal.
The move comes as plans by Italian state lender CDP, which is TIM’s second largest investor, to promote a counter bid for the same asset by Friday stalled in the absence of backing by the right-wing administration of Prime Minister Giorgia Meloni.
Leading officials from the Treasury and Meloni’s office are open to exploring a deal that would involve KKR while giving Rome strategic control on the infrastructure, government officials have told Reuters, adding no final decision has been made.
In its preliminary bid, KKR has left the door open to a government-backed entity becoming a minority investor in the infrastructure with a stake of up 30% and some vetting powers on strategic issues, sources have previously said.
KKR, which already owns a minority stake in TIM’s landline grid, submitted a non-binding bid for a controlling stake in a unit comprising TIM’s domestic fixed network and submarine cable unit Sparkle.
The U.S. fund’s approach has valued the unit at some 20 billion euros, including debt and a 2 billion euro earn out mechanism, two sources familiar with the matter have said.
Ceding control of TIM’s landline grid is a main plank of TIM Chief executive Pietro Labriola’s efforts to cut the former phone monopoly’s 25 billion euro debt pile.
TIM reiterated its board of directors would meet on Feb. 24 to discuss KKR’s non-binding offer.
