Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Telecom Italia CEO met Meloni's chief of staff on Wednesday - sources

Published 02/11/2022, 17:12
Updated 02/11/2022, 17:15
© Reuters. FILE PHOTO: Telecom Italia (TIM) General Manager Pietro Labriola poses for a portrait next to the company's name at TIM headquarters in Rome, Italy, January 17, 2022. REUTERS/Guglielmo Mangiapane

© Reuters. FILE PHOTO: Telecom Italia (TIM) General Manager Pietro Labriola poses for a portrait next to the company's name at TIM headquarters in Rome, Italy, January 17, 2022. REUTERS/Guglielmo Mangiapane

By Giuseppe Fonte and Elvira Pollina

ROME (Reuters) - The head of Telecom Italia (BIT:TLIT) (TIM) met a top aide of new right-wing Italian Prime Minister Giorgia Meloni on Wednesday, two political sources said, as investors speculate over potential government moves to help address the former phone monopoly's woes.

Labriola met Meloni's chief of staff Gaetano Caputi at the prime minister's office in Rome, the sources said, without providing further details.

TIM, struggling with heavy debt and tough domestic competition, declined to comment.

Meloni's Brothers of Italy party has criticised Labriola's plans to revamp the battered telecoms group, which are centered on the sale of its wholesale fixed network operations to state lender Cassa Depositi e Prestiti (CDP).

TIM last week extended talks with Treasury-owned CDP over a potential multi-billion euro offer for its landline grid for another month but said the negotiations would continue on a non-exclusive basis.

Under the potential deal, CDP, which owns a 10% stake in TIM, would merge TIM's infrastructure with that of smaller rival Open Fiber to create a national network champion under its control. CDP owns a 60% stake in Open Fiber.

Divergences on valuations have been a stumbling block in negotiations, with TIM's top investor Vivendi (EPA:VIV) seeking 31 billion euros ($30.58 billion) to back a deal, more than 10 billion above CDP's price tag, sources have said.

Sponsored by the previous government of Prime Minister Mario Draghi, the single network project now needs to be reassessed by the centre-right government that was sworn in last month.

Alessio Butti, responsible for telecoms policies in Brothers of Italy, has called on CDP to pursue the network project through a different route -- a takeover of TIM as a whole.

Butti's appointment as cabinet undersecretary has sparked speculation over a potential bid, pushing TIM's shares to a two-month high on Wednesday.

TIM will report its third-quarter results on Nov.9. A company-provided analyst consensus points to a 12% drop for the group core profit.

TIM's board is also expected to kick-off the process to select a minority partner for its enterprise service arm.

© Reuters. FILE PHOTO: Telecom Italia (TIM) General Manager Pietro Labriola poses for a portrait next to the company's name at TIM headquarters in Rome, Italy, January 17, 2022. REUTERS/Guglielmo Mangiapane

Rome has special anti-takeover powers to shield companies deemed of strategic importance from foreign interest. It could use these to stop any deal for TIM's assets.

($1 = 1.0136 euros)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.