Rete Tim, the Treasury chooses Ubs as advisor: the Cdp-Sparkle- WWN hypothesis

Work on the Tim network will also continue in August. The Ministry of the Economy has chosen UBS as a consultant in the negotiations for the purchase of the infrastructure e the share scheme of the 21 billion operation is taking shape. 65% of the company should go to the American fund Kkr, 20% to the Treasury. The Italian manager F2i and, to a lesser extent, Cassa Depositi e Prestiti should share the remaining 15% of the capital. The Italian shareholders would thus have a 35% stake, sufficient to block operations contrary to national interests.

State disbursement

The construction site of the work promises to be for a long time and the projects are in evolution. First of all, to go back to investing directly in a company after years, the Mef will have to find between 2 and 3 billion. It will not be an easy undertaking to find them in the folds of a balance sheet which certainly does not have excess cash, as the State Accounting Office would have also pointed out. The perimeter of the deal then remains to be defined, i.e. which of Tim’s activities will flow into the network company, which will remain with the telecommunications company, which will take a third route.

Sparkle’s fate

For example, insiders speculate that Sparkle, a strategic submarine cable company, may end under the control of CDP. Its valuation fluctuates between 500 million and 1.5 billion depending on the prospects. Sparkle is active in the thriving data market, but will have to make investments and perhaps mergers to face the competition from big tech who are laying cables in the seas in quantity.

The nodes of the competition

The Kkr-Mef consortium will have to pass the double scrutiny of the European authorities. On the one hand, the ministry’s participation in the infrastructure and governance powers granted to it could raise antitrust issues. The Treasury controls 83% of CDP which in turn is a 60% shareholder of Tim’s rival network, Open Fiber. A shareholding interweaving that could require the adoption of remedies aimed at protecting competition, in the form, for example, of limitations on the MEF’s access to some industrial information. On the other hand, the MEF investment risks incurring a ban on state aid, even if the fact that it is carried out under market conditions could avert problems.

Vivendi’s position

In short, there are numerous pieces of the puzzle: some will have to find a fit by the end of September – the date by which Tim awaits the binding offer of Kkr – others will require a months-long examination. The prejudicial unknown concerns the position of Vivendi, Tim’s leading shareholder with 23.75%. The day after the signing of the memorandum of understanding between the KKR and Mef, the French group defined the direct commitment of the government as positive. However, the appreciation is not a go-ahead. Vivendi considers the offer of 21 billion euro insufficient and is concerned about the sustainability of the service company lacking infrastructure. He would therefore like the so-called netco to take on more debt and more employees today in Tim’s head. Requests that the French are determined to assert in the confrontation with the government scheduled for September. As well as in the eventual meeting called to approve the sale of the network, whether ordinary or extraordinary.