By Elvira Pollina

MILAN (Reuters) – Telecom Italia (MI:) (TIM) has signed a non-disclosure settlement with Italian state lender CDP to begin formal talks on probably combining the cellphone group’s community with that of smaller broadband rival Open Fiber.

The transfer comes as TIM boss Pietro Labriola presses forward with a plan to revamp Italy’s largest cellphone firm centred round a break up of its wholesale community operations from its service enterprise.

The beginning of talks, introduced by the corporate on Saturday, is one more signal that TIM plans to chart a distinct course to a non-binding method for all of its enterprise made by U.S. fund KKR in November.

TIM stored KKR ready for 4 months earlier than agreeing in March to interact in talks, whereas urgent forward with its standalone reorganisation to unlock what the group calls its “untapped worth”.

A supply acquainted with the matter stated KKR will say in a letter on Monday that it’ll not pursue a proper bid except TIM grants it the due diligence the fund has been requesting for months, which has turn into extra essential because the market scenario adjustments as a result of Ukraine battle.

TIM, which requested KKR to say whether or not the phrases of its 10.8 billion euro method have been nonetheless legitimate, has stated the assessment can solely be confirmatory in nature, that means it must be preceded by a proper supply.

TIM’s board is predicted to debate KKR’s letter and a separate proposal from personal fairness agency CVC for a stake in its enterprise service enterprise on April 7.

SINGLE GRID

Rome has been eager to merge TIM’s mounted property with these of Open Fiber to keep away from pricey duplication of funding wanted to improve the nationwide community, however a deal has confirmed elusive attributable to antitrust points.

TIM stated it’s aiming to agree with CDP by April 30 a memorandum of understanding to outline the targets, construction and important analysis standards for the mixing mission.

Open Fiber is 60% owned by CDP, which in flip additionally owns 10% of TIM. Beneath the tie-up plan, state-owned CDP would get management of the merged community, sources have stated, which may ease antitrust points as TIM would now not maintain a majority.

Sources have stated TIM may later agree a compromise with KKR by involving the fund in its plans for the Open Fiber tie-up. KKR already owns a 37.5% stake in TIM’s last-mile community.