Is KKR looking to flip FiberCop?

Back in August, KKR successfully purchased 37.5% of TIM’s newly created FiberCop for €1.8 billion. Now, just a few months later, reports suggest that KKR is looking to offload up to 30% of their new holding to Infinity Investments, a subsidiary of ADIA.

 

If the deal goes ahead, ADIA will acquire 10.2% of FiberCop as a purely passive investor, financially supporting the €1.8 billion commitment by KKR. KKR will remain the sole active partner in the investment, meaning ADIA will not have any decision rights on operational matters.

 

According to Reuter’s sources, the move has somewhat irked the Italian government, who only gave KKR’s initial acquisition the green light last month. 

 

While typically very receptive to foreign investment, Rome does hold the power to veto unwanted deals when it comes to strategically important industries, including telecoms. According to sources, the government plans to meet with TIM official’s early this month to discuss the suitability of this potential investment.

 

This news serves to further complicate the already tangled web that is the potential TIM–Open Fiber merger. After finally getting TIM to agree to such a proposal back in September, the government is currently closely watching Enel, who is in discussions with Australia’s Macquarie for the sale of its 50% stake in Open Fiber. 

 

Late last month the government reportedly sent a letter to Enel, emphasising how important it was for Italy that the national fibre network be created as quickly and as smoothly as possible. They urged Enel not to sell the entire 50% stake to Macquarie, which would give the Australian company governance rights, and instead suggested that the state-owned investment bank Cassa Depositi e Prestiti increase its share of Open Fiber to 60%, leaving Macquarie the remaining 40%.