Macquarie offer for Open Fiber stake could speed single Italy network

By Stephen Jewkes and Giuseppe Fonte

MILAN/ROME (Reuters) - Infrastructure fund Macquarie has made an offer to buy all or part of Enel's 50% stake in its broadband joint venture Open Fiber in a move that could help speed up the creation of a single Italian network operator.

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The Italian government sees building ultra-fast broadband as a priority and has called on former phone monopoly Telecom Italia (TIM) and Open Fiber to reach an accord quickly on creating a single network.

TIM has been in talks for months over a merger of its fibre network assets with those of Open Fiber, but differences over issues such as governance and regulation have thwarted efforts.

"We believe that the entrance of Macquarie ... could be a strong catalyst towards the creation of the single network as it could speed up the negotiation given Enel's sceptical stance on the matter," Italian broker Fidentiis said.

Open Fiber is a wholesale-only broadband operator jointly owned by Enel and state lender Cassa Depositi e Prestiti (CDP), while TIM has both a network and a retail business.

In a statement on Tuesday, Enel said its board had received a non-binding bid from Macquarie Infrastructure Real Asset on June 10 for "the acquisition of the whole or part of the stake".

Enel CEO Francesco Starace has previously expressed concern about a vertically-integrated operator like TIM controlling a single network, saying it would not meet competition rules.

Analysts have said Open Fiber could be worth 3-6 billion euros, while TIM's copper and fiber network could be worth up to 15 billion euros.

A source from the co-ruling 5-Star Movement told Reuters the party was ready to support Macquarie if its investment in Open Fiber could accelerate the creation of a single network.

The source, who said Macquarie had outlined its plans to some government representatives, said the Movement was campaigning for CDP to raise its stake in TIM in an effort to break the stalemate.

Sources told Reuters recently that Macquarie was interested in buying a stake in Italian motorway group Autostrade per l'Italia and would be ready to team up with CDP for that deal.

The Treasury and Macquarie declined to comment.

TIM, in exclusive talks with U.S. fund KKR to invest in its own last-mile network, has made it clear it does not want to give up control of the network.

A second source from the 5-Star camp said talks between KKR and TIM had raised doubts among party members on implications for the future of the fixed network, which is deemed strategic by the government.

The head of broadcaster SKY's Italian operations, Maximo Ibarra, warned on Tuesday a single network must not be controlled by a vertically integrated operator.

($1 = 0.8837 euros)

(Reporting by Stephen Jewkes and Giuseppe Fonte, editing by Susan Fenton, Mark Potter and David Evans)

This story has not been edited by Firstpost staff and is generated by auto-feed.