Vodafone rejects Iliad’s Italian offer

Source: Vodafone

Vodafone has rejected Iliad Group’s upped offer to acquire its Italian operation, saying it would pursue other deals in the market, where it is struggling to turn its business around.

French media and telecoms tycoon Xavier Niel’s Iliad had proposed a 50:50 merger with the creation of a NewCo that would see Vodafone receive €6.6 billion of cash proceeds and €2.0 billion of shareholder loan, giving an enterprise value of €10.45 billion, while Iliad itself would get €0.4 billion of cash proceeds and €2.0 billion of shareholder loan, giving an enterprise value of €4.25 billion.

The group said it was “confident that the offer presented was the best possible business combination to benefit a struggling Italian market and telecommunications industry”.

Iliad said it would now pursue a standalone strategy in the Italian market, where it has grown a business from scratch to acquire over 10.5 million mobile subs as well as a growing fixed business.

Analysts expressed disappointment in Vodafone’s decision.

Iliad’s bid came two years after Vodafone rejected its first offer for Vodafone’s Italian operation.

Vodafone said at the time of the offer in December that it would review options for he Italian operation. The telco had reportedly been looking at a possible tie-up with Swisscom-owned Fastweb as an alternative, but this is seen as delivering fewer synergies than an Iliad tie-up, which would have created an Italian market leader.