TIM ‘asks Rothschild to advise’ on potential sale of Sparkle

29 October 2018 | Alan Burkitt-Gray

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The Rothschild investment bank is being called in to advice TIM on the future of Sparkle, its international wholesale division, the Bloomberg news agency is reporting.

The agency says that the question will be discussed on 8 November at a board meeting of TIM, the former Telecom Italia.

Capacity asked Sparkle for a comment, but the company did not respond. 

The activist investors that took control of TIM earlier this year are believed to have questioned the role of Sparkle in the group. In September the company's board said it was undertaking “further analysis of the opportunities to invest in assets and dismiss non-core assets following the deliberations taken on 24 July; these options will in
any case be subject to further discussions and subsequent decisions”. This is known to be a reference to Sparkle.

However over the past two years the Italian government has insisted that Sparkle is part of Italy’s critical national infrastructure and cannot be sold to a foreign investor. That is the reason why, when French media group Vivendi was the controlling shareholder, Sparkle was put under separate management.

However Vivendi lost control in early May to a group of activist shareholders controlled by the Elliott group.

Another large shareholder is Italy’s state investment group, Cassa depositi e prestiti (CDP), which in September was reported to be discussing an acquisition of Sparkle for €900 million. CDP is also an investor in Open Fiber, the rival national fibre-to-the-home project. 

This was after Italy’s industry minister Luigi di Maio said the government would not allow Sparkle to be sold in view of its strategic importance. Reports last month hinted that a CDP acquisition would be accepted by the Italian government.