MILAN (Reuters) - Representatives of Telecom Italia (BIT:TLIT)'s top investor Vivendi (EPA:VIV) will tell Italy's Economy Minister they remain sceptical about a government-sponsored plan to sell the telecoms firm's grid, sources familiar with the matter said.
Telecom Italia (TIM) has entered into exclusive talks with KKR to sell NetCo, a venture comprising the group's domestic fixed access network and submarine cable unit Sparkle.
A deal with KKR, which values NetCo at around 23 billion euros ($24.2 billion) when including debt and some variable items, is a key plank of TIM CEO Pietro Labriola's strategy to revamp the heavily indebted former national monopoly.
Vivendi CEO Arnaud de Puyfontaine and the company chairman Yannick Bollore are preparing to reiterate their concerns over the deal when they meet Italian Economy Minister Giancarlo Giorgetti in Rome on Thursday, the sources said.
The sale has effectively been endorsed by Giorgia Meloni's right-wing administration which authorised the Treasury to join the fund's bid for the telecoms backbone, an asset deemed of strategic national interest.
With its 24% voting stake, Vivendi could throw a spanner in the works at any TIM shareholder meeting to vote on a deal or subsequently challenge it in the courts.
In particular, Vivendi will express its concerns over the sustainability of TIM's remaining service business under the terms of the grid sale, while valuation also remains a stumbling block, according to the sources.
The French group, which quit TIM's board in January after a round of fruitless talks with the government over the future of TIM, earmarked a price of 31 billion euro to back a grid sale, sources have previously said.
Vivendi, which first invested in TIM in 2015, has been repeatedly forced to write down the value of its holding and faces a 75% theoretical loss on its initial 4 billion euro investment.
($1 = 0.9517 euros)