TIM confirms potential NetCo sale delay

KKR wants more time to submit a final offer for TIM’s networks business, leaving the Italian incumbent facing yet another delay in the sale process.

To the untrained eye that could look like bad news. But we saw it coming – there have been rumblings in the Italian press over a possible delay for the past week or so – and a slightly later bid deadline could actually indicate that the process is progressing well, rather than signifying trouble in the ranks.

TIM at the weekend confirmed that it has received a request from KKR to extend the exclusivity period between them to 15 October. When it selected KKR as its preferred bidder for the networks business back in June it set a date of the end of September for the private equity firm to table a binding offer. So essentially KKR is just looking for an extra fortnight to, in TIM’s words, “conclude the preparatory activities” and submit the offer.

The telco didn’t have much else to say on the matter, as we have come to expect. It simply noted that its board of directors will meet on Wednesday to evaluate the request.

The general opinion in Italy seems to be that TIM will approve it, which makes sense, given that it’s only a matter of a couple of weeks.

Meanwhile, we’re all waiting to see what happens when Vivendi executives meet with government officials at an as yet unspecified date in the near future. According to Milano Finanza, the government recently accepted a request for a meeting from Vivendi and it’s likely to take place before KKR submits its final offer. Aside from the fact that Vivendi chairman Yannick Bolloré and CEO Arnaud de Puyfontaine will be present, the paper has no more information about the meeting at this stage.

The government is, of course, now involved more closely in the networks sale, having agreed last month to buy into NetCo alongside KKR. The Ministry of Economy and Finance inked an MoU with TIM that will enable it to purchase up to 20% of NetCo, the legal formalities of that agreement then being sorted just days later.

Vivendi has long been a spoke in the wheel with regard to the NetCo sale, its expectations on valuation being significantly higher than everyone else’s, including – crucially – the firms bidding for the assets. Over time the parties have come closer together and it’s starting to look like they could reach agreement, but the French firm will not roll over easily. Oh to be a fly on the wall at that government rendez-vous…

While TIM inches closer to selling NetCo and reshaping its business, there are other developments occurring in the Italian telecoms sector that could have a bearing on its future.

On Saturday La Stampa reported that Open Fiber is about to change its chief executive. Mario Rossetti will resign as CEO of the fibre builder in the next couple of days, the paper’s sources claim, naming Giuseppe Gola, former CEO of utility group Acea, as his most likely replacement.

The paper purports that managers and shareholders at Open Fiber are looking for a new leader to take the company through its next phase of development. While Rossetti oversaw the company during the complexities associated with its change its ownership – Open Fiber is now owned 60% by state-backed lender and major TIM shareholder CDP and 40% by Australia’s Macquarie – a new face will tackle its next major challenge, which is connecting rural and industrial areas of Italy with fibre.

Gola has some experience in telecoms, the paper points, out, including almost 15 years at Wind, a decade of which he spent as CFO.

But while the new chief executive’s remit will centre on network rollout, there remains a potential link to the TIM NetCo sale. Although all eyes are on the KKR deal at present, the possibility of a merger with Open Fiber somewhere down the line remains.

The web of Italian telecoms remains pretty tangled.

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