By Elvira Pollina
MILAN (Reuters) - KKR is working to present a new offer for Telecom Italia's submarine cable unit Sparkle as the U.S fund presses ahead with due diligence on the assets, three sources familiar with the matter said on Thursday.
The sale of Sparkle, the international wholesale cable unit of Telecom Italia (TIM) whose network extends over 600,000 km, is part of CEO Pietro Labriola's plan to part ways with the former phone monopoly's fixed network assets to cut its debt pile.
At a meeting last week, TIM and KKR advisers discussed a valuation of around 750-800 million euros, up from a previous non-binding offer of around 600 million euros ($654 million), deemed as to low by TIM, according to the sources.
The terms of any offer for Sparkle, including the valuation, need to be discussed with the Italian Treasury, which has teamed up with KKR to co-invest in Telecom Italia's fixed network assets, seen as strategic by the government, the sources said.
KKR and TIM declined to comment.
KKR has until Dec. 5 to complete ongoing due diligence on Sparkle but the deadline could be extended, a fourth person briefed about the matter said.
At this stage, a review of a potential offer for Sparkle at an ordinary TIM board meeting scheduled on Dec.14 is unlikely, the person added.
TIM's agreed in November to sell its domestic fixed line grid to KKR in a deal worth up to 22 billion euros, when including debts and some potential future payments.
Opposed by TIM's top investor Vivendi, which has signalled it would challenge it in court, the deal is backed by Prime Minister Giorgia Meloni's administration.
As part of an agreement with KKR, the government authorised the Treasury to spend up to 2.5 billion euros to take a 15-20% stake in the network venture and to take over Sparkle at a later stage.($1 = 0.9172 euros)
(Reporting by Elvira Pollina; Editing by Keith Weir)