By Elvira Pollina
MILAN (Reuters) - KKR has started an informal process to select the future head of Telecom Italia (BIT:TLIT)'s (TIM) network business, ahead of an expected binding offer for the asset by the U.S. fund in the coming weeks, two people close to the matter told Reuters.
In its non binding approach for NetCo - a venture comprising TIM's fixed access network and submarine cable unit Sparkle - KKR has valued the business at around 23 billion euros, including debt and taking into account a number of variables.
KKR, which is set to hold the majority of NetCo, has asked executive recruitment firm Egon Zehnder to put together a list of candidates for the role of chief executive, one of the sources said.
The CEO candidate KKR is expected to put forward would need the support of minority investors in NetCo, the people said, cautioning deliberations were still ongoing.
KKR and Egon Zehnder both declined to comment.
The U.S. fund's approach has received the backing of Giorgia Meloni's conservative administration, which last month approved measures paving the way for the Treasury to join KKR's bid for NetCo, an asset deemed of strategic national interest.
The Treasury has said it plans to spend up to 2.2 billion euros for a 15%-20% stake in NetCo. Investments by other state-backed entities are expected to raise the combined stake in Italian hands to around 30%-35%.
KKR is expected to file its binding offer by Sept. 30 after TIM in June granted the fund a period of exclusive talks.
The deadline could be slightly pushed back, another two sources separately said.
TIM directors are expected to take stock of progress in negotiations with KKR at an ordinary board meeting which a person with knowledge of the matter said had been scheduled for Sept. 27.