Because Vodafone rejected Iliad’s offer
Vodafone rejected Iliad and Apax's offer for Italian businesses. Here are the news
Vodafone remains in the Italian market for now.
The Anglo-Saxon TLC group rejected the preliminary manifestation of interest in 100% of Vodafone Italia from Iliad and the Apax Partners fund because "it is not in the best interests of the shareholders", reads a note from the British group.
Iliad had made an offer to take over the Italian division of Vodafone equal to 11 billion euros. This was reported by a source to Reuters confirming what was anticipated by the Financial Times . The price represents about seven times the core operating profit of Vodafone Italy.
Too low for the British group and compared to what some analysts imagined. "Faced with a cash offer for 14 billion, Vodafone could agree to leave the beautiful country without remorse: only the 5g licenses cost 2.4 billion and selling now that competition is on the highest and margins on the minimum, does not make justice to the potential value and to the investments made in recent years ". hypothesized during the week of the Republic .
The decision to reject the offer comes at a particular time for Vodafone as the group “is grappling with the entry into the capital of two activist funds: Cevian Capital AB and Coast Capital” underlines Il Sole 24 Ore .
All the details.
VODAFONE REJECTS ILIAD'S OFFER
The Anglo-Saxon group, reads the press release, "confirms that it has received an extremely preliminary and non-binding indication of interest from Iliad and Apax partners to acquire 100% of Vodafone Italy".
The proposal, adds the group, "is not in the best interests of the shareholders and was therefore rejected".
MA FOCUS ON CONSOLIDATION OPPORTUNITIES
Vodafone's board of directors and management therefore remain “focused on creating shareholder value through a combination of the medium-term organic growth strategy and ongoing portfolio optimization”. Furthermore, the company “continues to pragmatically pursue many consolidation opportunities that create value to obtain sustainable market structures in its main European markets, including Italy”.
Therefore the group intends to pursue the consolidation of the sector, but the offer was too low to sell Vodafone Italia. On the other hand, Italy is the third largest market in terms of revenues after Germany and the United Kingdom.
ILIAD'S OFFER FOR VODAFONE ITALIA
In recent months, Iliad, led by billionaire founder Xavier Niel, has been examining options for further expanding into Italy.
Today the operator is present both on the mobile segment, where it has 8.5 million subscribers for a market share of over 10%, and on the fixed market. About a year and a half after the announcement, on January 25 Iliad made its debut in the fixed telephony market in Italy.
By incorporating Vodafone Italia, Iliad would have changed dimensions. According to the latest Agcom Observatory, Vodafone has a market penetration of 28.5% among mobile phone customers. Iliad has a mobile market share of approximately 7.7%. Together they would surpass the market leader Tim (currently with a market share of 28.8%) with an aggregate turnover of almost 6 billion euros.
THE SPECIAL MOMENT OF THE BRITISH TLC MULTINATIONAL
Finally, “a detail that is far from negligible in history is the pressure that the Vodafone group is breaking down with the recent arrivals of funds from activist Cevian Capital and the other activist Coast Capital. The CEO of Vodafone Group, Nick Read, in the conference with analysts on Wednesday did not escape the M&A issue, pointing out that he is ready for extraordinary transactions, even quickly, but at the right price in various markets, including the UK, Spain, Italy and Portugal ”highlights Il Sole 24 Ore .
But for Vodafone, Iliad's offer was not in line with the company's value.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/innovazione/perche-vodafone-ha-schifato-lofferta-di-iliad/ on Thu, 10 Feb 2022 15:29:07 +0000.