TIM lifted by expectations of single Italian broadband network
Reuters
Published Aug 05, 2020 05:30AM ET
MILAN (Reuters) - Telecom Italia (TIM) (MI:TLIT) shares rose by 3.4% on Wednesday as investors anticipated an acceleration of talks with Open Fiber to create a single ultra-fast broadband network in Italy.
TIM on Tuesday postponed to the end of August a decision over the sale of a minority stake in its so-called secondary landline, after Rome requested it negotiates a wider deal to merge its network assets with those of Open Fiber.
A Milan-based trader said TIM's decision to extend the deadline showed a commitment to reaching a deal with Open Fiber.
"We have never been so close to reaching a deal on the single-network," Mediobanca (OTC:MDIBY) Securities analysts wrote.
Despite months of talks with Open Fiber, a joint venture owned by state utility Enel (MI:ENEI) and state lender Cassa Depositi e Prestiti (CDP), issues regarding governance and regulation have so far stood in the way of a potential deal.
CDP also owns also a 10% stake in TIM, whose shares were up 3.4% at 0837 GMT, outperforming Milan's blue-chip index (FTMIB). TIM shares have lost nearly 31% this year.
UBS analysts, however, cautioned against excessive optimism.
"We note the end of August might prove a very tight deadline to reach a deal considering its complexity and the multiple parties involved", UBS wrote in a note to clients.
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Written By: Reuters
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