By Elvira Pollina and Juby Babu
(Reuters) – Telecom Italia (TIM) said on Thursday it was unhappy with sweetened bids submitted by suitors for its fixed network, and set a final deadline of June 9 to receive an improved offer from at least one of the bidders.
TIM directors gathered on Thursday to draw a response to rival non binding approaches for its landline grid by KKR and a consortium comprising state lender CDP and fund Macquarie, worth 21 billion euros ($23 billion) and 19.3 billion euros, respectively. In a statement after the board meeting, TIM said it deemed the bids “not yet adequate”, adding at least one of the bidders had expressed its readiness to improve its non-binding offer.
Three sources with knowledge of the matter said KKR was willing to work further on its bid’s terms. KKR declined to comment.
The sale of TIM’s fixed network and its submarine cable unit Sparkle is critical to CEO Pietro Labriola’s plan to slash the company’s 25 billion euros of debt and revive its struggling domestic business.
Both approaches for TIM’s most valuable asset remain well below the 31 billion euros sought by TIM’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 company, 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.
Italian Prime Minister Giorgia Meloni last month said her right-wing administration would 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; Writing by Valentina Za; Editing by David Gregorio and Bill Berkrot)