TIM considers €700 million bid for Sparkle

There's nothing surprising in that. Its non-binding bid for the business that landed two and a half months ago was of the same value. That perhaps begs the question why it took the state so long to get its act together and lodge a binding bid – it twice had its offer deadline extended – but we're not privy to the final details of the proposed transaction that clearly took some time to hammer out.

The market appears to have been expecting more. TIM's shares dropped on Thursday morning as the news filtered out, reversing gains from earlier in the week when rumours of a possible takeover, on the back of CVC Capital Partners' interest in Vivendi's 24% stake, sent the telco's stock price skyward.

Indeed, that €700 million figure is lower than TIM was apparently initially hoping for. Back in the mists of time, when TIM was still embroiled in the process of selling off its networks business, it earmarked Sparkle for inclusion in sale and rumour has it that KKR, which eventually picked up the unit, was willing to pay as much as €1.5 billion for Sparkle, while state-owned Cassa Depositi e Prestiti (CDP) valued it at €700 million.

Meanwhile, Milano Finanza claims that TIM was looking for up to €1 billion for Sparkle, were it to be included in NetCo.

Naturally, we're not privy to all the details, but either way it seems the €700 million price tag is probably the bottom end of what TIM would be willing to accept. It rejected the MEF's first offer, of undisclosed size, back in January and it took another eight months for the state to come back with a bid that passed muster. Meeting in the middle has clearly not been easy.

But the ball is now – finally – back in TIM's court. The new offer submitted by the MEF and investment partner Retelit is valid until 27 January.

"The offer is subject to customary conditions for transactions of this nature and to the completion of the financing process," TIM said, in a statement.

"TIM will start the relevant evaluation and decision-making process as soon as possible," it added. It would probably be unwise to expect any further update this year.

It would be surprising if TIM did not have a decent idea already of what the state's offer would look like, and clearly the sticker price has already been discussed, so it could be that there's not too much for TIM's board to discuss. But chances are the parties involved will find a way to string this out for as long as possible.