TIM Gets Rival Bid From Italian Government for Cable Business — Update

By Nina Kienle

Telecom Italia has received a bid from the Italian government for its submarine-cable unit Sparkle, a move that may spell an end to negotiations with private-equity firm KKR over the business.

The Italian telecommunications company said late Wednesday that the offer includes an option for TIM to retain a minority stake in Sparkle, but didn't set out the financial terms of the bid.

The offer could value Sparkle at around 625 million euros ($676.2 million) and include some EUR125 million in additional payments, according to Italian newspaper La Repubblica.

TIM had previously been in talks with KKR over a sale of Sparkle, but rejected an initial bid as too low. It accepted in November a bid of more than $20 billion from the group for its other fixed-line assets as it looks to shed some of its heavy debt load.

KKR confirmed that it had made no new offer for Sparkle. In December, TIM granted KKR an extension to its deadline to submit a fresh offer for the unit, moving it to the end of January. TIM didn't immediately respond to a request to clarify if the government bid means an end to talks with KKR over the business.

The government offer, made via the finance ministry, is valid for 15 days and will be reviewed at a meeting of the board of directors on Wednesday, TIM said.

A move to jettison Sparkle would have only a limited effect on the groups' deleveraging efforts, as well as its earnings, Equita Sim's Domenico Ghilotti wrote in a research note.

Write to Nina Kienle at nina.kienle@wsj.com

(END) Dow Jones Newswires

February 01, 2024 06:09 ET (11:09 GMT)

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