Italian state lender CDP readies offer for TIM's network after national vote

Telecom Italia (TIM) logo is seen displayed in this illustration taken, May 3, 2022. REUTERS/Dado Ruvic/Illustration

MILAN (Reuters) - Italian state lender CDP is readying a preliminary offer for Telecom Italia's landline grid, it said on Tuesday, as it presses ahead with plans to create a single broadband company with Open Fiber after a general election on Sunday.

"We are strictly working with our partners to finalize the valuation process of the assets in accordance with the memorandum of understanding entered into on May 29," CDP said in a statement.

CDP is now expected to submit a non-binding offer in the first half of October, two sources familiar with the matter said, cautioning deliberations are ongoing.

TIM and CDP reached a preliminary agreement in May aimed at creating a unified broadband champion merging TIM's assets with those of Open Fiber under CDP control.

That was part of a plan sponsored by the outgoing government led by Mario Draghi and was intended to help improve broadband coverage and speeds across the country, avoiding a duplication of investment.

Under the preliminary agreement sealed in May, CDP and TIM aimed for a binding deal by the end of October.

But differences on the value of assets and political uncertainty linked to the snap election have caused multiple delays to the non-binding offer.

TIM's top investor Vivendi is looking for a valuation of 31 billion euros to back a sale of the grid, a source familiar with the French media group had said.

CDP, which owns a 10% stake in TIM and also controls Open Fiber, values Telecom Italia's landline grid in the region of 20 billion euros including debt, two sources familiar with the matter said, cautioning discussions are still under way.

Other sources pointed to a range of 15-18 billion euros. CDP declined to comment on valuations and timing of the offer.

Nationalist party Brothers of Italy, which led the right-wing bloc that won the election, backs the creation of a unified network champion but has called on CDP to pursue the plan by taking over TIM.

A new government, likely to be led by Brothers of Italy leader Giorgia Meloni, is expected to be installed around the end of next month.

(Reporting by Elvira Pollina; Editing by Keith Weir)

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