KKR & Co. signed a memorandum of understanding with Italy to include the government in its €23 billion ($25.3 billion) bid for Telecom Italia SpA’s network, as Rome pushes to retain some oversight over an asset it deems strategic. Shares jumped.

The US private equity firm signed a preliminary agreement with the Economy Ministry that could give Italy’s Treasury as much as 20% in the former phone monopoly’s network business, according to a ministry statement. The announcement marks a second major move by Primer Minister Giorgia Meloni after imposing a surprise windfall tax on banks earlier this week.

Telecom Italia shares rose as much as 5.6% in Milan trading to the highest since April, boosting the company’s market value to 6.15 billion euros.

The terms of the Telecom Italia offer “foresee a decisive role of the government in defining the strategic choices,” the Economy Ministry said.

In June, Telecom Italia kicked off exclusive talks with KKR on the sale of the network in a bid to slash debt. The US firm valued the network, or grid, at as much as €23 billion, people familiar with the matter said at the time. That includes earnout payments made if results hit certain levels.

Read More: KKR Close to Involving Italy in Telecom Italia Network Deal

Prime Minister Giorgia Meloni has signaled that she considers Telecom Italia’s network a strategic asset that must retain a degree of public oversight. Italy’s government has the right to veto deals involving strategic assets, and Rome’s desire to safeguard the company’s 40,000 employees means that any offer without state backing would face significant hurdles.

Still, a definitive agreement isn’t assured. Telecom Italia’s largest shareholder, the French media-conglomerate Vivendi SE, has repeatedly said it values the grid at around €30 billion and could still seek to halt the network sale process by calling an extraordinary shareholders meeting, people familiar with the matter said.

Telecom Italia, a former monopoly, faces a complex mix of high labor costs and the need for ever-growing investments to modernize its network infrastructure. Grid separation has been debated in Italian industry and politics for more than a decade, with details and deal outlines shifting continually.

--With assistance from Antonio Vanuzzo.

(Updates with shares in third paragraph)