Telecom Italia has recently announced that it has received a bid for its submarine-cable unit, Sparkle, from the Italian government. This bid potentially brings an end to the negotiations between Telecom Italia and private-equity firm KKR over the future of Sparkle.
According to Telecom Italia, the offer presented by the Italian government includes an option for TIM to retain a minority stake in Sparkle. However, specific financial details of the bid have not been disclosed at this time.
Previously, TIM had been engaged in talks with KKR regarding a potential sale of Sparkle. However, the initial bid from KKR was deemed too low by TIM. In a separate deal, TIM had accepted a bid of over $20 billion from the group for its other fixed-line assets in an effort to reduce its significant debt.
To allow KKR to submit a revised offer for the Sparkle unit, TIM granted an extension to the deadline in December. This extended deadline was set to the end of January. TIM has not yet clarified if the bid from the Italian government implies the termination of negotiations with KKR. Additionally, they have not responded to requests for confirmation. Similarly, KKR has not issued any immediate comments on the matter.
Telecom Italia has stated that the government’s offer, made through the finance ministry, is valid for 15 days. A meeting of the board of directors is scheduled for Wednesday to review and discuss this offer.