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KKR is in exclusive discussions with debt-laden Telecom Italia (TIM) over the acquisition of Netco, a venture comprising both TIM’s fixed domestic access grid and submarine cable unit Sparkle.
The Memorandum of Understanding (MoU) signed on Thursday provides for the Treasury to take a stake of up to 20% as part of any binding offer and for the government to play a key role in strategic decisions relating to TIM’s network.
KKR has until the end of September to make a binding bid after opening talks with TIM in June.
The U.S. fund has offered some 23 billion euros ($25.3 billion) when debt and a number of variable items are factored in, people close to the matter have said. The actual equity valuation is around 10 billion euros.
Sources had told Reuters on Tuesday that KKR and the Italian Treasury could sign an MoU for the government to co-invest alongside the U.S. firm in the grid as early as this week. ($1 = 0.9108 euros)
