Exclusive-Telecom Italia's grid sale faces challenger plan

investing.com:

By Elvira Pollina

MILAN (Reuters) — A London-based investment firm representing Telecom Italia (BIT:TLIT) (TIM) shareholders owning under 3% of the group is seeking to challenge its plan to sell its landline grid, proposing an alternative revamp, a letter to the board seen by Reuters shows.

The challenge from Merlyn Advisors and a former TIM senior executive comes after U.S. fund KKR tabled a binding offer for TIM's grid that valued it at around 23 billion euros ($24 billion), including debt and some variable components.

The letter, signed by Merlyn Advisors' founder Alessandro Barnaba, an ex-JPMorgan banker, and Stefano Siragusa, a former TIM deputy general manager, is dated Oct. 27 and addressed to TIM's board of directors.

Under the proposed alternative scheme, TIM would retain its entire fixed network business as well cloud and digital services operations, while selling its domestic retail business and its prized Brazilian unit to cut its heavy debts.

The sale of the fixed line network is a key plank of TIM CEO Pietro Labriola's strategy to revamp the debt-laden group. However, it has faced major reservations from TIM's top investor Vivendi (OTC:VIVHY).

TIM, KKR and the office of Prime Minister Giorgia Meloni all declined to comment. Vivendi was not immediately available for comment.

TIM's board is due to meet to evaluate KKR's bid on Nov. 3 and again on Nov. 5.

Meloni's conservative government has effectively endorsed KKR's approach, authorising the Treasury to take a 15-20% stake in TIM's grid for up to 2.2 billion euros alongside the U.S. fund.

Aiming to reverse the course taken by Labriola, the rival plan envisages TIM holding onto its grid to become an infrastructure company with no retail business, the letter