Iliad, the French carrier backed by telecom billionaire Xavier Niel and a major shareholders in Eir, has made an offer for Vodafone Group’s Italian unit, people with knowledge of the matter said.
The French company submitted a bid to Vodafone’s board last week, the people said, asking not to be identified because the information is private.
Vodafone is currently looking for merger opportunities in the UK, Spain, Italy and Portugal, chief executive Nick Read said on Wednesday. Bloomberg previously reported that activist investor Cevian Capital has taken a stake in England-based Vodafone and is agitating for change, including selling some operations or pursuing stock buybacks.
Vodafone shares rose 2.9 per cent following the report on Monday, while Telecom Italia shares reversed earlier losses, with investors betting that Italy’s former phone monopoly could benefit from market consolidation.
Representatives from Vodafone and Iliad declined to comment.
Consolidation
Europe’s major telecoms firms are racing to consolidate, after years of low margins and increased pressure from investors. Vodafone recently approached wireless rival Three UK, owned by CK Hutchison Holdings, while Reuters and El Confidencial reported talks in Italy and Spain respectively.
Iliad is also considering a move to purchase a rival phone carrier in Italy if the opportunity arises, local unit chief executive Benedetto Levi said in an interview with Bloomberg News in January.
Iliad, which is majority owned by Mr Niel, owns more than 30 per cent of Eir, the Irish incumbent. Separately, Mr Niel’s private investment vehicle also owns more than 30 per cent of Eir.
Iliad moved into the Italian mobile services market in 2018 as a no-frills challenger, sparking a price war that last year led to three profit warnings by ex-monopolist Telecom Italia.
Italy is one among the world’s most competitive markets for mobile services, with rivals including CK Hutchison Holdings’ Wind Tre SpA already active. – Bloomberg
