Published by Global Banking and Finance Review
Posted on February 7, 2025
By Elvira Pollina
MILAN (Reuters) -French telecoms group Iliad and CVC Capital Partners have separately informed the Italian government of their respective interest in potential deals involving former phone monopoly Telecom Italia (TIM), sources told Reuters on Friday.
Italy considers TIM as strategic and any deal involving its assets needs Rome's backing. The government has 'golden powers' to vet any stake purchase bigger than 3%.
Iliad CEO Thomas Reynaud informed Finance Minister Giancarlo Giorgetti and other top government officials this week that the French firm is studying a tie-up between its Italian business and TIM, said a source with knowledge of the matter.
Meanwhile, representatives of private equity firm CVC, who had held talks with France's Vivendi to buy its 24% stake in TIM, also discussed their plans with senior Italian government officials in recent weeks, another two sources said.
The Italian Prime Minister's office declined to comment, while Italy's Treasury did not respond to a request for comment.
Italian state lender CDP is TIM's second-largest investor behind Vivendi, which is considering its options for a stake which is worth 1.1 billion euros at current prices.
Last year, TIM completed a landmark 18.8 billion euro sale of its fixed-line asset network to a consortium led by U.S. fund KKR. It will update its business strategy next week.
TIM's shares rose as much as 5% to a 13-month high on Friday, against a slightly negative Milan blue chip index. Shares in Paris-listed Vivendi, which did not respond to a request for comment, were also more than 5% higher.
M&A DRIVE
Founded by French billionaire Xavier Niel, Iliad launched low-cost mobile services in Italy in 2018, intensifying already fierce price competition in its mobile market.
It has repeatedly called for consolidation to reduce the number of mobile network operators in Italy from four to three and sought to buy Vodafone Italia operations last year.
Boston Consulting Group, Lazard and Mediobanca are working with Iliad on a potential deal, the source said.
BCG and Lazard declined to comment. Mediobanca was not immediately available for comment.
CVC had been eyeing Vivendi's TIM stake as a bet on the consolidation widely seen as inevitable to prop up profit margins in the Italian telecoms sector.
The private equity firm, which declined to comment on Friday, has long been interested in TIM's assets.
In 2022 it approached TIM to buy into its enterprise service arm, comprising TIM cloud, cybersecurity and connectivity services for big corporate customers.
(Reporting by Elvira Pollina in Milan, additional reporting by Giuseppe Fonte in Rome, editing by Giulia Segreti and Alexander Smith)
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