The Italian government has told Telecom Italia to halt the sale of network assets to KKR, pushing instead for the creation of a single national fibre network.
Officials on Tuesday asked Telecom Italia to delay the €1.8bn sale of a 37.5 per cent stake of its fibre and copper, so-called “secondary”, network to the US buyout group, according to several people involved.
Under the existing plan, Telecom Italia’s last mile grid would be transferred to a newco, FiberCop, which would be responsible for upgrading the copper street-to-building network to fibre.
The government considers the network a national strategic asset and wants state-controlled utility Enel to be involved in forming a single efficient national network.
The delay is “by no means a way to interfere with a private company’s plans but rather a way to improve its potential”, said one Italian official speaking on condition of anonymity.
Shares in Telecom Italia rose 5.3 per cent on Wednesday on the potential for the creation of the broader single network.
Parties within Italy’s ruling coalition have contrasting views about the best way to successfully create a single national network and plans will be discussed over the next few weeks, according to multiple people involved.
Luigi Gubitosi, Telecom Italia’s chief executive, said earlier this year that KKR’s offer was a first step towards a possible integration with Open Fiber.
Telecom Italia said the board looked “very favourably upon the idea to speed up the national single network project and will be enthusiastically taking part in the works the government intends to launch over the next few hours”.
Telecom Italia said the board had been reconvened for August 31 and would make its final assessments on KKR’s offer.
However, according to multiple people involved, Enel, Open Fiber’s main shareholder, has so far resisted merger suggestions because it does not want to give up control of the fibre networks it built from scratch.
Spokespeople for the Italian government did not immediately respond to a request for comment. KKR declined to comment.