Italian operator group TIM has received a second offer for its network assets, this time from a consortium of CdP Equity (CDPE) and Macquarie, and that means the race is on.

The telco was already sitting on a non-binding bid from KKR, which tabled an offer of unspecified value for a stake of undefined size in the networks unit a month ago. It seemed then that other offers would emerge and a CDP/Macquarie grouping was the most likely candidate, but nothing came through by 24 February, the date TIM had set for a board meeting to discuss the KKR bid.

However, TIM and KKR agreed to push back their agreed bid deadline to accommodate a request from the government, and we all waited…

Better late than never, as far as TIM is concerned, at least, state-backed lender and existing TIM shareholder Cassa Depositi e Prestiti’s (CDP’s) PE arm and financial group Macquarie have submitted a non-binding bid of their own, this time for 100 percent of the telco’s as yet to be established NetCo business.

NetCo comprises TIM’s core fixed-line business, its FiberCop fibre-to-the-home (FTTH) unit, and international wholesale operator Sparkle.

The offer expires on 31 March, TIM said in a brief statement, that included little in the way of additional detail on the bid. Its board will discuss the offer at a meeting on 15 March, or “another date to be defined,” TIM said.

While the companies themselves are giving little away, the Italian financial press is awash with speculation on the sizes of the bids being weighed up by the telco.

Like a number of other publications, Il Sole 24 Ore puts the valuation of both bids at a broadly similar level: around the €20 billion mark. But the financial daily explains that there are differences. Specifically, it says the CDP/Macquarie bid would be better for TIM because it will give the telco an additional €1.5 billion-€2 billion in liquidity.

The CDP/Macquarie offer would involve up to €10 billion in cash, €8 billion of debt, plus an earn-out of €2 billion to be paid pending the fulfilment of certain conditions, the paper said. Meanwhile KKR’s offer is based on €10 billion of debt and €10 billion of equity, it said.

The pros and cons of both are to be hammered out by the powers that be at the telco over the coming days.

What we already know is that both bids are some way below the price tag TIM’s perennial thorn-in-the-side shareholder Vivendi is looking for – something north of €30 billion. It’s now a question of watching and waiting to see whether the French firm will accept its fate or continue to lobby for a higher price.

Either way, TIM looks to be nearing an actual deal for NetCo, more than a year after it first shared its plans to split itself in two. Then again, we’ve thought that before…

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