By Elvira Pollina and Giuseppe Fonte
MILAN (Reuters) -Australian fund Macquarie is raising legal hurdles over a plan backed by Italy's Treasury for state lender CDP to join forces with U.S. fund KKR to buy Telecom Italia (BIT:TLIT)'s (TIM) landline grid, three sources said.
TIM (MI:TLIT) directors have set a final deadline of June 9 for potential improved offers by the U.S. private equity firm and a rival consortium comprising CDP and Macquarie, worth 21 billion euros and 19.3 billion euros respectively.
TIM has deemed both not yet adequate. TIM shares fell as much as 5.4% on Tuesday morning.
People familiar with the matter told Reuters this month the Treasury would welcome CDP joining forces with KKR for TIM's prized grid, with one source saying government officials ware pushing for CDP to drop its separate proposal.
But Macquarie is raising legal issues about a possible alliance between CDP and KKR, three sources close to the matter told Reuters late on Monday.
CDP and Macquarie are co-investors in Open Fiber, a smaller rival to TIM.
According to the sources, some clauses included in the Open Fiber shareholder pact could give the Australian fund some leeway to complicate any CDP decision to drop the alliance with Macquarie and join KKR's proposal.
One of them said Macquarie was aiming to improve its offer with CDP ahead of next month's deadline.
A source close to CDP said the state lender was still working with Macquarie to provide some clarifications TIM had requested over their latest offer, adding no decision has been taken yet.
The sale of TIM's most valuable asset is the main option for the phone group to cut its 26 billion euro debt pile.
KKR's approach is seen at present as the stronger alternative by TIM CEO Pietro Labriola and some leading government officials, sources have previously told Reuters.
Italy's right-wing government wants to secure strategic oversight of the grid, Italy's main telecoms infrastructure.
KKR has left the door open for the government to have a minority stake directly or through state-backed entities but the fund was wary of teaming up with CDP due to antitrust issues, sources familiar with the matter have previously said.
Rome can use its so-called "golden power" regulation to set conditions or block attempts to take over strategic assets such as TIM's network.
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