October 3, 2014 / 10:46 AM / 6 years ago

UPDATE 1-Telecom Italia gives CEO mandate to buy stake in Metroweb-source

* F2i controls 53.8 pct of Metroweb

* State lender CDP controls Metroweb alongside F2i

* Acquisition would help boost Telecom clients (Recasts lead, adds second source, details)

By Alberto Sisto

CAPRI, Italy, Oct 3 (Reuters) - Telecom Italia has given a mandate to CEO Marco Patuano to negotiate the acquisition of a majority stake in Italian fibre optic network provider Metroweb owned by infrastructure fund F2i, a source close to the matter said.

Approval for talks on a deal which would help Telecom Italia boost investments in faster networks was given at the last board meeting, the source said on Friday. Some analysts have valued Metroweb at around 400 million euros ($505 million).

Telecom Italia and F2i declined to comment.

Buying a stake in Metroweb would allow Telecom Italia to join forces with cash-rich state lender Cassa Depositi e Prestiti (CDP), which indirectly controls Metroweb with F2i.

People familiar with the matter said in March such a deal was possible for Telecom Italia.

But managers of Metroweb shareholders CDP and Fastweb said they were not aware of any plans to sell the F2i stake to Telecom Italia.

The source did not say if any talks were planned or when they could take place.

Metroweb is 87 percent controlled by Metroweb Italia, which in turn is 53.8 percent owned by F2i and 46.2 percent owned by CDP-owned fund FSI. Fastweb owns 10.6 percent of Metroweb.

The acquisition of F2i’s stake would allow Telecom Italia to increase its fibre optic reach, attract new clients and help avoid duplication in costly investments at a time when it is battling to cut debt of almost 27 billion euros.

“The Italian government is looking to draw up legislation that could make it worthwhile, tax-wise, for Telecom Italia to invest in this through another company and not as Telecom,” a source with knowledge of the matter said.

Patuano said on Thursday the company intended to continue with the sale of its Italian mobile towers in order to invest resources in the broadband network.

Italy has one of the lowest penetration rates for broadband in Europe. (1 US dollar = 0.7926 euro) (Additional reporting by Stephen Jewkes Writing by Oleg Vukmanovic; Editing by David Holmes)

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