CDP and Macquarie presents counteroffer for TIM’s fixed network


TIM is now asking US private equity firm KKR if they would like to increase their initial bid for the business

At the start of February, US-based equity fund KKR approached Italy’s incumbent telecoms operator, TIM, with a non-binding offer for a stake in the company’s network infrastructure unit, NetCo.

The details of the offer were not revealed, but sources suggested that the move would see KKR take a majority stake in the business and leave a roughly 30% stake free for a government-backed investor.

The bid came as the culmination of long-term interest in TIM’s infrastructure assets by KKR; in 2020, the investor took a 37.5% stake in TIM’s ‘last mile’ network unit, Fibercop, and, in late 2021, offering TIM itself a takeover bid worth €10.8 billion.

Though this bid was ultimately rejected, KKR’s interest in the TIM has not waned over the past year, with the private equity firm closely linked to ongoing discussions surrounding the creation of a single national broadband network by merging TIM’s infrastructure unit with Open Fiber.

Now, with its latest bid, KKR is once again attempting to take the reins of the Italian broadband market.

However, it is not without competition.

After KKR’s offer was first announced, it quickly became clear that Italian state-backed bank Cassa Depositi e Prestiti (CDP) – a significant stakeholder in both TIM and Open Fiber – was planning a counter bid in partnership with Australian infrastructure fund Macquarie Group. In fact, by the end of the month, the government had asked KKR to extend the terms of its offer, in order to allow time for the counterproposal to be constructed.

Now, this weekend, the CDP and Macquarie have finally presented TIM with just such an offer, the details of which have yet to be revealed.

According to sources, both the bid from CDP–Macquarie and that from KKR value the infrastructure unit at €18–20 billion – an impressive figure, but one that is that is unlikely to please TIM’s key stakeholder Vivendi, who has previously valued the unit at closer to €30 billion.

On the other hand, this bid from CDP–Macquarie is likely to be more appealing to new Italian government under Giorgia Meloni, which has repeatedly emphasised TIM’s national grid as a key strategic asset.

Both the offer from KKR and the new offer from CDP–Macquarie are set to expire by the end of March, with TIM now asking KKR if it would like to increase its original offer.

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