May 11, 2016 / 2:56 PM / 3 years ago

UPDATE 1-Enel seen winning over Telecom in battle for Metroweb - sources

* Enel set to make sweetened offer for Metroweb stake

* New bid would value Metroweb at around 820 mln euros

* High-speed Internet network is key plank of Renzi’s agenda (Adds details, comments)

By Stefano Rebaudo and Silvia Aloisi

MILAN, May 11 (Reuters) - Italian utility Enel is expected to present a sweetened offer for a stake in fibre network firm Metroweb that is seen giving it an edge over a rival bid from Telecom Italia, two sources familiar with the matter said.

Enel’s offer is part of its plan to roll out a high-speed Internet network - a key plank of Prime Minister Matteo Renzi’s reformist agenda.

Its new, formal bid would value the whole of Metroweb, owned by infrastructure fund F2i and state lender Cassa Depositi e Prestiti (CDP), at around 820 million euros ($935 million), matching a binding offer presented by Telecom Italia this week, the sources said on Wednesday.

The sources said CDP, whose consent is effectively needed for any friendly bid for Metroweb, favours a deal with Enel over Telecom Italia because it would allow it to steer one of Renzi’s pet projects.

Enel plans to run fibre optic cables along its power network and having a slice of Metroweb would boost its ambitions because of the broadband firm’s expertise.

Renzi presented Enel’s broadband plan at his office last month, in what was seen as a clear endorsement of the utility and a snub for Telecom Italia, which has its own broadband plans. Telecom Italia’s 15-billion-euro copper network would be made redundant by a fast switch to fibre.

Enel last week presented an informal offer to buy F2i’s 54 percent stake in Metroweb, valuing the group at 776 million euros. On Monday, a source said Telecom Italia had presented an all-cash bid to buy all or 67.7 percent of Metroweb, valuing the group at more than 820 million euros.

Enel’s new offer could again be for F2i’s entire stake or for a portion of F2i’s and CDP’s holdings, one of the sources said. Another option is for Enel to invest in Metroweb via a reserved capital increase.

Should Enel’s offer win, Metroweb would be controlled by the utility’s broadband vehicle, Enel Open Fibre, CDP and F2i, if the fund decides to remain an investor, one person added.

Enel and F2i declined to comment, while CDP was not immediately available for comment.

Telecom Italia initially tried to gain control of Metroweb in exchange for a stake in its Sparkle unit, an asset considered strategic because its submarine network transmits information between countries in Europe, the Mediterranean and the Americas.

One source said that deal failed because CDP Chairman Claudio Costamagna wanted all of Sparkle and Telecom was not prepared to cede control, and there was also disagreement over valuation.

$1 = 0.8775 euros Reporting by Stefano Rebaudo and Silvia Aloisi; writing by Agnieszka Flak; editing by Adrian Croft

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