By Giuseppe Fonte, Elvira Pollina and Valentina Za
MILAN (Reuters) -State-backed financial conglomerate Poste Italiane is expected to hold a board meeting over the weekend to discuss a potential investment in Telecom Italia (TIM), three sources close to the matter said.
Under the scheme being considered, Poste would acquire state lender Cassa Depositi e Prestiti’s 9.8% stake in TIM, with CDP receiving Poste’s 3.78% stake in Italian payments group Nexi in return, the sources said.
CDP is also expected to hold a board meeting at the weekend, one of the first three sources and another person said.
The expected stake swap follows the promotion in September of CDP executive Fabio Barchiesi as the new deputy director general, and a renewed alliance in January among Nexi’s top shareholders including CDP, which owns 14.5% of the group.
TIM is among the Italian corporate assets the government deems of strategic national importance.
CDP first invested in TIM in 2018 during the government’s digital connectivity push, as the former state phone monopoly moved to upgrade its fixed-line network with fibre optic technology.
With a heavy debt load hindering investments on the network, TIM last year sold the grid to U.S. fund KKR, which teamed up with Italy’s Treasury on the deal.
Postal service provider Poste would be investing in a downsized TIM which operates services for retail and more lucrative corporate clients but no longer owns Italy’s main telecoms infrastructure. Poste also offers phone services through its Poste Mobile arm.
All the parties involved declined to comment.
CDP is currently TIM’s second biggest investor after French media group Vivendi, which is also open to divesting its 24% stake in the group.
With the Italian telecoms sector seen as ripe for consolidation, the slimmed-down TIM has also drawn interest from French telecoms group Iliad and CVC, sources told Reuters.
Poste, like CDP, would be a state-backed investor, with the advantage of running a business that lends itself to commercial partnerships with TIM.
TIM CEO Pietro Labriola said on Thursday Iliad or Poste were the two partners that made the most sense for TIM.
“We said it back in 2022. Three years later everyone is saying it. We don’t have a preference between the two and we don’t want to comment on rumours,” he told analysts.
CDP’s stake in TIM is worth more than 450 million euros ($469 million) at current market prices, while Poste’s 3.78% stake in Nexi has a value of around 210 million euros.
Europe’s payments sector is seen as needing consolidation, and a link-up of Nexi and French rival Worldline has long appeared an obvious option to counter the growing dominance of U.S. players.
CDP taking a bigger stake in Nexi would strengthen Italy’s position relative to Worldline shareholder France if the two companies were to explore a tie-up, bankers have said.
($1 = 0.9603 euros)
(Editing by Jan Harvey)
