TIM sells remainder of towers business for €250 million

The Italian incumbent has monetised its towers pretty much to the max in recent years, leaving it with a small indirect stake that we already knew it was willing – keen, even – to part with. Further, the Ardian-led consortium that has agreed to buy the stake already owns the rest of the business. Ultimately then, none of this is a surprise.

But it is noteworthy that in a year in which it has divested its network assets – after much preamble – and will likely agree a deal for its subsea cable business Sparkle, TIM is bringing in another quarter of a billion euros for its towers.

The fact that the deal was something of a formality is reflected in the tone of TIM's announcement, in which it simply stated the T&Cs of the arrangement and added little in the way of additional commentary.

It noted that it has agreed to sell its remaining 10% in Daphne 3, a holding company for 29.9% of towers company INWIT's share capital. The deal values INWIT at €10.43 per share, which translates to TIM bringing home proceeds of around €250 million, likely in the fourth quarter of this year, subject to the satisfaction of all the usual closing conditions.

The €250 million is not included in TIM's guidance for full year 2024, and should make a dent in its debt pile. Reducing leverage remains a key, and closely-watched, tenet of TIM's strategy for the next few years.

Presuming the deal completes as planned, it marks the end of an era for TIM, which has been squeezing cash out of its towers business for years, while still retaining a small presence in the market.

INWIT was formed almost a decade ago after TIM – then still known as Telecom Italia – spun off and subsequently listed its towers assets, which it then merged with those of Vodafone Italia four years ago. In August 2022 TIM completed the sale of a 41% stake in Daphne 3 to the consortium of investors headed by Ardian for €1.3 billion, leaving it with only the 10% stake it has now agreed to part with.

With its interest in towers now behind it, TIM is free to concentrate on its core business, which, as of July, is telecoms services, its NetCo business now sitting with new owner KKR and the Italian state. But while it focuses on its remaining ServCo business making a positive start as an asset-light entity, TIM still has some hefty infrastructure assets to deal with in the form of Sparkle.

The Italian government made an offer of undisclosed value for Sparkle, a strategically important national asset, in February, but TIM pushed it back, asking for more money. The state has yet to return to the table with a new bid; the Italian press has been speculating on an imminent offer for the past couple of months, but as yet there has been no announcement from either party.

Doubtless TIM is hoping to have something to share in the autumn. In the meantime, the INWIT divestment gives it something to cheer.