By Elvira Pollina
MILAN (Reuters) -Shares in Telecom Italia (BIT:TLIT) (TIM) rose as much as 4% on Friday as the board of the phone group set a final deadline of June 9 for improved offers for its prized landline grid.
TIM directors met on Thursday to draw up a response to rival approaches for the grid from KKR and a consortium of state lender CDP and fund Macquarie, worth 21 billion euros ($23 billion) and 19.3 billion euros, respectively.
After the board meeting, TIM said the were bids "not yet adequate", adding at least one of the bidders had expressed its readiness to improve its non-binding offer.
Three sources with knowledge of the matter said KKR was willing to work further on its bid terms. KKR declined to comment.
TIM shares were 3.7% higher at 0930 GMT compared with a 1.2% rise in Italy's blue chip index.
In its daily note, Banca Akros said the outcome of the meeting has "positive implications as the board at least has not stopped the sale process".
The sale of the network is a key plank of TIM CEO Pietro Labriola's plan to turnaround the struggling former phone monopoly by slashing its 25 billion euro debt pile.
Under pressure for years in due to stiff price competition in its domestic market, junk-rated TIM is now grappling with higher interest rates and may need to bolster its capital if the network sale does not materialise shortly, analysts say.
Labriola's strategy has been challenged by the company's top investor Vivendi (EPA:VIV), which is seeking a valuation of 31 billion euros for the phone group's main asset.
The French media giant has been piling pressure on directors to draw a line under the network sale process, given the yawning valuation gap and concerns over the sustainability of TIM's remaining business.
Vivendi, which owns a 23.8% stake in TIM, relinquished its seats on the board and is calling for changes to how the group is run as it aims to negotiate an alternative plan with the Italian government.
Vivendi's concerns are shared by some TIM board members, people familiar with the matter said on Friday.
($1 = 0.9071 euros)