Iliad revised the public offer it made on 18 December 2023 – Vodafone says it will continue talks with other parties
Iliad’s offer was publicly made on 18 December 2023 and subsequently revised. The French group proposed a merger of iliad Italia and Vodafone Italia to create “the most innovative telecom challenger” in Italy.
Vodafone Group has rejected the offer according to a statement from Iliad.
The revised offer omitted the option for Iliad to assume total control of the new, combined entity over time. It also upped its cash offer to €6.6 billion from the original offer of €6.5 billion. Iliad also lowered what it receive, from €500 million to €400 million.
The parties would have still stood to gain €2 billion from a shareholder loan and half each of the new entity.
Best offer?
The iliad Group said it is confident that the offer presented was the best possible business combination to benefit a struggling Italian market and telecommunications industry.
Vodafone is clearly not of the same mind. It issued a statement today saying it is no longer in negotiations with Iliad but “our discussions with other continues”.
Vodafone is known to have entered into discussions about a possible merger with or divesting some of its assets to Fastweb, Swisscom’s Italian unit. It has 34% market share of the enterprise segment and supplies internet technology to the public sector, but does not have any mobile network.
Vodafone Group’s CEO, Margherita Della Valle, is keen to address the European markets that are not earning above the cost of capital, which are Italy and Spain. It is in the process of offloading its entire Spanish business to investment firm Zegona for €5 billion.
What now for Iliad Italia?
Two years Vodafone rebuffed an offer from the French group to buy Vodafone’s entire Italian operation for more than €11 billion.
After the latest rejection, iliad Group said in a statement that it “will therefore pursue its stand-alone strategy building-on its great track record”. It points to the 10.5 million mobile subscribers it has signed up since entering the Italian market in May 2018.
It also says has more net broadband net additions than the other four main operators and reported more than €1.0 billion revenues in 2023 with an operating free cash flow at break-even levels.
iliad added it “will continue to strengthen its positions in Italy and fiercely pursue market share gains across all segments”.