(Reuters) – Telecom Italia said on Sunday its board had approved a bid by U.S. fund KKR to buy its landline network, a move its main investor Vivendi described as illegal and said deeply regret.

The offer presented by KKR values ​​TIM’s fixed telephone network at 18.8 billion euros, the Italian group said in a press release, adding that the operation for the whole of Netco – which also includes the activities of Sparkle submarine cable – amounted to 22 billion euros and would reduce its debt by around 14 billion euros.

This operation should be completed by the summer of 2024, reported TIM, which last June granted KKR a period of exclusive negotiations.

Supported by the conservative administration of the President of the Italian Council Giorgia Meloni, this sale is one of the cornerstones of the project of the general director of TIM, Pietro Labriola, intended to get the group out of the financial abyss.

Sources told Reuters that TIM planned to finalize the sale without shareholders’ approval, despite a vote previously requested by Vivendi, which had expressed reluctance to accept the terms proposed by KKR.

Reacting to the decision of the TIM board of directors, Vivendi said it “deeply” regretted that KKR’s offer had been accepted “without having previously informed and solicited the vote of the shareholders of Telecom Italia, thus violating the applicable governance rules .”

“The decision (…) is also tainted by illegality given the non-compliance with the rules relating to significant transactions with related parties,” the French group said in a press release, adding that it would use “all legal means at its disposal to contest this decision and protect its rights as well as those of all shareholders.

(Report by Elvira Pollina in Milan, written by Jean Terzian)

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