MILAN (Reuters) - Italian utility Enel is close to presenting an offer for a controlling stake in fiber network company Metroweb as part of plans to roll out a high-speed Internet network, two sources familiar with the matter said on Thursday.
Developing a national ultra-fast broadband network is an important part of the reformist agenda of Prime Minister Matteo Renzi, who has enlisted state-controlled Enel’s help to achieve the goal.
Owning Metroweb, controlled by state lender Cassa Depositi e Prestiti (CDP) and infrastructure fund F2i, would boost Enel’s plans in this area because of Metroweb’s assets and expertise.
Enel, Italy’s biggest utility, earlier this year set up Enel Open Fiber (EOF) to manage its fiber ambitions and plans to invest 2.5 billion euros ($2.85 billion) to bring ultra fast broadband into peoples’ homes using its existing power network.
“Enel is looking to buy F2i’s 54 percent stake and then merge EOF with Metroweb and do a capital increase to fund broadband investments,” a second source said.
The source said Enel has valued Metroweb at around 760 million euros, but the valuation could still change as the utility did not want to overpay.
“(Enel‘s) bid should be ready in coming days,” one of the sources said.
F2i declined to comment.
The purchase would also strengthen Enel’s position relative to former state telecoms monopoly Telecom Italia, which has its own plans to expand fast Internet coverage in Italy.
Telecom Italia is in parallel talks with F2i and CDP to buy Metroweb for cash and in exchange for a stake in its international wholesale unit Sparkle, sources have said.
One source said that a rival bid from Telecom Italia valued Metroweb at around 650 million euros but had the edge over Enel because of the Sparkle stake it was offering to CDP in exchange.
“It’s like a game of chess,” the source said.
Telecom Italia declined to comment.
CDP, which controls Italy’s gas and power grid companies Snam and Terna, is keen to tighten its grip on strategic networks in the country.
If CDP were to own a slice of Sparkle this would help the government prevent it from falling into foreign hands, especially given the growing influence of French media group Vivendi as a major investor in Telecom Italia.
Sparkle is deemed strategic because its submarine network transmits information between countries in Europe, the Mediterranean and the Americas.
Two other sources familiar with the matter said a final offer from Enel for Metroweb had not yet been presented and talks were ongoing. Telecom Italia is also pushing ahead with talks over Metroweb and this could be discussed at a board meeting on May 13.
Additional reporting by Agnieszka Flak. Editing by Jane Merriman