Enel reportedly values Italian fibre network subsidiary at €8 billion, but CDP is taking a more conservative approach

Open Fiber’s owners cannot agree on the level at which the company should be valued, at best slowing progress on a deal with TIM and at worst putting such a deal under threat altogether, it emerged this week.

State-owned lender Cassa Depositi e Prestiti (CDP) and state-backed utility Enel, which jointly own the Italian fibre network operator, are "miles apart" on valuation, Reuters quoted an unnamed source as saying. Unless they can reach agreement, they will be unable to broker a deal with TIM, the source added.

The sources said Enel values Open Fiber at €8 billion, but CDP, which is also a TIM shareholder with a stake of close to 10% as of the end of June, is taking a more conservative approach. Various analysts and bankers approached by the newswire valued Open Fiber at between €1.5 billion and €4 billion, it said.

The Italian government is pushing to create a single fibre network in the country to boost coverage and avoid duplication of investment. Incumbent telco TIM is now open to the plan after a lengthy boardroom battle on the subject.

However, as Reuters reports, talks thus far between CDP and Enel have centred on the structure of the deal, and have yet to formally move on to valuation. That suggests that any deal will be a long time coming.

Indeed, the newswire quoted both TIM chief executive Luigi Gubitosi and Enel CEO Francesco Starace as having said in recent days that a tie-up could take time to materialise.

Its sources noted that there are many issues to be addressed, aside from valuation.