Telecom Italia’s (TIM) top investor Vivendi is looking for a valuation of 31 billion euros ($33 billion) for fixed landline network, far higher than analysts and the telecom company had forecast, Reuters news report said.
TIM’s landline grid should carry at least 10 billion euros of the company’s debt were it to be separated from the group’s services arm.
Vivendi owns 23.8 percent of TIM and its support is important for any asset separation deal to go through.
TIM’s new CEO Pietro Labriola is currently working on a revamp plan for the debt-laden phone group centred on the separation of its wholesale fixed network operations from its services businesses.
Pietro Labriola will present his strategy to investors on July 7.
TIM is also considering an outright sale of its domestic landline grid and its international cable unit Sparkle.
TIM has signed a non-binding accord with state lender CDP – the second-biggest investor in TIM after Vivendi – to create a unified broadband champion in Italy combining TIM’s network assets with those of CDP-controlled rival Open Fiber.
CDP would control the combined network entity.
Vivendi CEO Arnaud de Puyfontaine has warned Vivendi would only back a sale of the network that valued it fairly, rejecting as inadequate analyst valuations for the grid of 17-21 billion euros before synergies.
The value is also far higher than a price tag for the business estimated by TIM of about 20 billion euros including debt.
Vivendi’s much higher valuation could complicate reaching an accord with CDP and Open Fiber over the sale of the network.
The French media group was a long-term investor in TIM and, following a split, would focus its strategic efforts on the group’s services arm which it ruled out selling.