MILAN (Reuters) – Italy’s Cassa Depositi e Prestiti (CDP) is considering selling its stake in broadband operator Open Fiber to Telecom Italia (TIM), which would issue the state-owned lender with shares in return for the holding, Il Messaggero reported.

This could pave the way to a single ultrafast broadband operator through a merger of TIM’s network with Open Fiber, which is co-owned by state-lender CDP and Italy’s biggest utility Enel, to avoid duplicating investment.

The proposal is one option CDP’s top executives have discussed with TIM’s major investor French media group Vivendi, Saturday’s Il Messagero report said.

CDP, which recently became TIM’s second-largest shareholder with a 9.9% stake, would thereby lift its stake to between 20% and 25%, close to or more than Vivendi’s 23.9%.

TIM would then merge its network assets into Open Fiber and keep control of the network company, Il Messaggero added.

The plan would trigger a reshuffle in TIM, as Vivendi and activist fund Elliott would be diluted, the report said.

TIM’s Chief Executive Luigi Gubitosi said earlier this month that merging Open Fiber with TIM’s networks would be positive for both companies, adding that TIM would maintain some kind of control of the new network entity.

CDP, Elliott, TIM, Enel and Vivendi declined to comment.