Tele 2 soars in Stockholm, Iliad buys 20 per cent of the Swedish company

(Il Sole 24 Ore Radiocor) - The European telecoms risky turns the spotlight on Sweden, with the acquisition of 19.8% of Tele2 by the investment vehicle formed by Xavier Niel and Iliad. On the Stockholm Stock Exchange in the morning, Tele 2 B shares were up 8.5% to SEK 90.53, taking second place on the Stoxx Europe 600 index, closely followed by Kinnevik (+6.8% to SEK 108.35), which sold its stake to the French tandem. The share purchase carries an average unit price of SEK 94.2, which represents a 13% premium to Tele2's share closing on Friday.

The Iliad group has announced that Freya Investissement, a vehicle jointly controlled by the French telecoms company itself and NJJ Holding (the personal holding company of Niel, Iliad's founder and main shareholder), has reached a binding agreement to acquire 19.8% of Tele2, for a cash sum of around SEK 13 billion, or EUR 1.16 billion. After approval by the authorities, Freya "will become the ultimate shareholder of Tele2 upon completion of the transaction", a statement said. "The acquisition of this strategic stake will provide the Iliad group, through Freya, with an opportunity to expand Tele2's growth and collaborate with Tele2's management team on innovation, convergence and investment in next-generation networks," Iliad points out. The deal had the 'unanimous support' of the boards of Iliad, Freya and Kinnevik.

The transaction will take place in three tranches, concerns the purchase of both A and B shares of Tele 2 and is conditional on the go-ahead of the antitrust authorities and, where required, of the national authorities regarding foreign investments. It will be financed for EUR 500 million by Iliad Holding and for the remaining EUR 650 million by NJJ Holding and Freya. Hence, the transaction will have 'a limited impact on the Iliad Group's leverage and will result in a moderate increase of 0.14x at the Iliad Holding level', the telecom operator points out. The first tranche will be realised 'shortly after the signing of the agreement'. Freya expects to finalise the second during the second quarter of 2024, while the finalisation of the third is expected to take place by the third quarter.

"As a result of the transaction, Iliad will hold less than 30 per cent of Tele2's voting rights, the statement stressed. "The Iliad Group and the Tele2 Group have a lot in common. We both believe in the power of innovation and the importance of an entrepreneurial mindset. Our industry in Europe is very demanding, so we have great respect for what the shareholders, management and teams at Tele2 have achieved,' commented Thomas Reynaud, CEO of the Iliad Group and director of Freya. As the operators note, with the new deal, Niel is moving a new pawn to consolidate his positions in the European telecommunications sector. He acquired a 2.5 per cent stake in the British Vodafone in 2022, and Iliad also tried, unsuccessfully, to take over Vodafone's operations in Italy.