By Elvira Pollina

MILAN (Reuters). Telecom Italia Directors of (MI:), (TIM) will discuss Monday a plan for reorganizing Italy’s largest telecoms company. Newly appointed Chief Executive Pietro Labriola attempts to find an alternative to a U.S.-based fund KKR.

Ex-monopoly phone company is looking at splitting up its domestic operations into an infrastructure and separate service entity. This will allow it to extract value and make a long-planned merger with Open Fiber, the state-backed rival.

Labriola previously managed TIM’s Brazilian operation. Labriola has been working on a plan for a stand-alone response to the 10.8 million euro ($12.2billion) offer from KKR. TIM’s biggest shareholder, French media firm Vivendi (OTC), said that it was too low.

According to sources, Labriola’s plans are still being finalised, and will be presented to investors in March. The NetCo would comprise the entire Telecom Italia fibre and network infrastructure, as well the Sparkle submarine cable unit, according to sources.

Monday’s board meeting starts at 11:03 GMT. Sources indicated that TIM is unlikely to take a firm stance regarding the KKR proposal prior to March.

According to sources, the network company will assume substantial Telecom Italia’s net credit and the majority of Telecom Italia’s domestic staff of 42,500.

The company’s main focus would be to sell a broad range of products to various groups, including consumers and SMEs, as well as large corporations and clients in the public and private administrations.

($1 = 0.8843 euros)