Neither Illiad nor Vodafone are commenting on the deal which could reshape the Italian telecoms landscape
Reuters reports that French telecoms group Iliad has offered more than €11 billion for Vodafone’s Italian business, citing an unnamed a source close to the matter. News of the bid was broken earlier this month.
This is about seven times Vodafone Italia’s core operating profit, according to the source who also said that Iliad plans to team up with a private equity firm for the bid, and is looking to financing from “a top European bank”.
By comparison, Telecom Italia (TIM) is still assessing a €10.8 billion bid from infrastructure investor KKR to gain a controlling share and take the company private.
Desire to change landscape
Iliad’s billionaire owner, Xavier Niel, delisted the Iliad Group he founded last year and has since made it clear he is keen to expand in Italy and, through consolidation, stablise the market that has been severely disrupted since Iliad launched its Free brand in the country in 2018.
If Vodafone Italy, with about 28% of the mobile market, and Free joined forces, they would account for about 36% of the mobile market, ahead of TIM’s 28%.
However, reducing the number of main mobile operators from four to three has previously run contrary to the European Union’s Competitive Commission, so approval is by no means guaranteed, assuming Vodafone accepts the offer.
Vodafone Group it is under considerable pressure from activitist shareholder Cevian Capital to divest or consolidate its operations in smaller markets, and has debts of about €47 billion.