ROME, December 22, Reuters - The main investors in Telecom Italia TIM are discussing a revamp of the former phone monopoly, Italy's prime minister said, he pledged to protect jobs and infrastructure assets at the group.
A series of profit warnings has led to the sacking of Chief Executive Luigi Gubitosi a week after a takeover approach by U.S. fund KKR.
Prime Minister Mario Draghi told reporters at a traditional end of year news conference that it was not yet clear what was going on with TIM.
There are negotiations between CDP, Vivendi and other TIM shareholders, and the situation is changing, as is a takeover bid that has to be announced, according to Draghi.
Vivendi, a French media group led by financier Vincent Bollore, is the main shareholder in TIM with a near 24% stake. It said that KKR's bid does not adequately value TIM.
Sources said Vivendi is trying to find an agreement with CDP, TIM's second-largest shareholder with a 10% stake.
The prime minister said the government wants to protect three things in the corporate overhaul of TIM: jobs, infrastructure, and the group's first-rate technology.
The corporate structure that we will get to, through decisions taken by TIM shareholders or the government, will need to meet those three goals, Draghi said.
KKR and Vivendi have a set of projects that involve spinning off TIM's infrastructure assets, which need investments to support Italy's digital push, from its services arm.
The previous government tried to spin-off TIM's infrastructure assets to crate a single ultra-fast network across Italy but that project stalled.
There are new ideas on how to proceed virtually every week, but the government's line will be dictated by the need to protect those three aspects, Draghi said.
Following Gubitosi's resignations, TIM promoted senior executive Pietro Labriola to General Manager and said it will try to name a new boss as soon as possible.
In the leadership vacuum, TIM has failed to grant KKR access to its books, a condition set by the fund to proceed with a formal bid.
KKR's $37 billion takeover proposal is conditional on backing from the company's board and Italy's government.
The government is not in a position to say I want this or that. The situation is in rapid evolution, as there is no predetermined path, according to Draghi.