Telecom Italia Pushes KKR to End Bid, Join Spinoff Plan (1)

Telecom Italia SpA is seeking to get KKR & Co. to scrap a 10.8 billion-euro ($12.1 billion) takeover bid for the company by involving the U.S. private equity giant in an in-house plan to spin off its landline network, people familiar with the matter said.

The phone carrier, which has internally valued the bid as too low and lacking enough value-creation, instead wants to involve KKR in a plan to spin the landline network off into a new unit called NetCo, said the people, asking not to be named since the discussions aren’t public.

The counter-proposal would still allow KKR ...