By Mauro Orru 
 

Telecom Italia SpA said late on Thursday that investment firm KKR & Co. Inc. submitted a non-binding offer to be its exclusive partner in fiber network development.

The announcement comes as the Italian telecommunication company continues to assess "possible forms of integration" between its own and wholesale operator Open Fiber's optical fiber networks.

"We believe KKR's involvement might go beyond the pure fiber infrastructures," said Thomas Coudry, analyst at European investment bank Bryan Garnier, citing a Bloomberg report suggesting that KKR submitted an expression of interest to acquire a 49% stake in Telecom Italia's secondary network of copper and fiber lines. It also suggested the two could partner to buy Open Fiber, which is a 50:50 joint venture between Enel SpA and Italian state lender Cassa Depositi e Prestiti.

"We view the transaction as a significant catalyst for Telecom Italia as it should significantly contribute in the group's deleveraging, and also help crystallize the value of Telecom Italia's infrastructure at a time when the group is being challenged on the retail side," Mr. Coudry said, adding that selling a 49% stake could reduce Telecom Italia's debt by more than 15%.

 

Write to Mauro Orru at mauro.orru@wsj.com; @MauroOrru94

 

(END) Dow Jones Newswires

February 28, 2020 05:37 ET (10:37 GMT)

Copyright (c) 2020 Dow Jones & Company, Inc.
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