TIM looking for investors for Open Fiber venture as Conti steps down as TIM chairman

27 Sep 2019

Telecom Italia (TIM) has approached a number of investment funds about taking a stake in a combined broadband infrastructure firm which would be created if TIM can broker an agreement to merge its fixed network assets with those of wholesale operator Open Fiber. Merger negotiations between TIM and Open Fiber have been ongoing for several months but are thought to have been slowed down due to disagreements over the valuation of Open Fiber and questions regarding the source of any future funding.

Reuters says that TIM has been speaking with infrastructure investment funds and sovereign banks about potentially taking a stake in the combined networks business. Its report cites an unnamed source as saying: ‘A few weeks ago Telecom presented Open Fiber shareholders with a list of long-term investor funds that could come to the rescue by buying part of the company.’ Australian investment bank Macquarie has been named as one of the funds that has been approached. The entry of one or more new investors could clear the way for Open Fiber’s 50% owner, Italian utility group Enel, to exit the venture.

Reuters says Open Fiber has valued itself at around EUR8 billion (USD8.8 billion), while TIM’s figure is closer to EUR5 billion-EUR6 billion.

Separately, TIM’s chairman Fulvio Conti has stepped down in a move which Reuters says ‘signals an easing of tensions between the group’s main shareholders’. TIM shareholders Vivendi of France and US fund Elliott have had a series of disagreements over the future direction of the telco, and Conti – who was appointed by Elliott in May 2018 – had been accused of siding with the US firm. Relations between Vivendi and Elliott have now improved, with Conti having said there is ‘a renewed climate of trust’ between the two parties. In his resignation statement he said he had fulfilled his mandate and was standing down ‘in light of the stability achieved by the board in its operations and the renewed focus on creation of sustainable value for all the company’s stakeholders’.

Italy, Elliott Management, Open Fiber, Telecom Italia (TIM), Telecom Italia Group (TIM Group), Vivendi