By Elvira Pollina and Giuseppe Fonte

MILAN (Reuters) -Italian state lender CDP stated on Sunday its board had permitted a non-binding provide for the mounted community of former cellphone monopoly Telecom Italia (BIT:) (TIM), including it might be legitimate till March 31. CDP has teamed up with Australian infrastructure fund Macquarie to bid for Italy’s most essential telecommunications infrastructure.

The joint bid targets TIM’s landline community and submarine cable unit Sparkle, for which U.S. funding agency KKR has already offered a proposal.

In current weeks, sources have advised Reuters that CDP-Macquarie and KKR have each set an 18-billion-euro ($19 billion) enterprise worth for TIM’s grid.

CDP’s provide would additionally contain TIM’s smaller fibre-optic community rival Open Fiber, which is owned by CDP and Macquarie and could be folded into TIM’s grid down the street.

KKR’s proposal, which rises to twenty billion euros when together with a 2 billion euros earn-out, has given contemporary impetus to efforts to revamp TIM after the failure of extended talks involving the federal government and TIM’s high two shareholders – CDP and France’s Vivendi (OTC:).

Each figures are beneath the 31 billion euro price ticket Vivendi has set to again promoting the grid, for which TIM itself has indicated a valuation of 25 billion euros.

TIM stated on Feb.24 KKR’s proposal “doesn’t totally replicate” the worth of its asset and added it might search an improved provide by the top of this month.

The grid’s sale to chop TIM’s 25 billion euro debt pile and offload half of its 40,000 home workers is a principal plank of CEO Pietro Labriola’s push to reshape the group.

The federal government of Prime Minister Giorgia Meloni has repeatedly stated it needs to win management of TIM’s community whereas defending jobs, however there is no such thing as a widespread floor inside the administration on how you can proceed.

Beneath Italian guidelines, Rome has the ability to dam undesirable curiosity for property of strategic significance akin to TIM’s grid.

CDP’s transfer is welcome as a result of it makes the sale course of extra clear however nonetheless leaves a number of situations open, a senior authorities supply stated.

In its method, KKR has left the door open to involving a state-run entity as a minority shareholder in TIM’s grid, but it surely opposes CDP enjoying such a task as a result of antitrust points.

($1 = 0.9406 euros)