Vodafone continues its push in London following Xavier Niel’s surprise move

(Il Sole 24 Ore and Radiocor) - Vodafone continues its rally on the London Stock Exchange, triggered by French billionaire Xavier Niel’s significant investment in the company. Shares in the British telecoms group, led by Margherita Della Valle, have recorded further gains, on top of the 12.6 per cent rise seen on Friday.

Vega, a company controlled by the Niel family, announced on 10 July that it had reached an agreement with Emirates Telecommunications to acquire a 16.2 per cent stake in Vodafone for approximately 5.1 billion euros. The owner of Iliad expressed confidence in the group’s growth prospects; having sold its Italian operations to Fastweb and its Spanish operations to the Zegona fund, the group now operates in the United Kingdom, Germany and a number of African countries. The shares will be acquired through off-market block trades by certain financial institutions for hedging purposes as part of financial instruments entered into by Vega, which will be settled in kind once the necessary regulatory approvals have been obtained. Settlement in kind is expected by the end of the year.

Vega, established solely for the purpose of holding Vodafone shares, will become Vodafone’s largest shareholder upon completion of the transaction, subject to approval by the relevant authorities, and “intends to be a committed long-term shareholder and a supportive partner for Vodafone”. The vehicle also states that it “has no intention of launching a bid for the entire shareholding in Vodafone”. Niel, for his part, emphasised that “as a leading investor based in Europe”, he is “ready to contribute to the future success” of Vodafone. “We have a proven track record of helping companies improve their performance and create substantial value for shareholders,” added the head of Iliad.

The press release issued on Friday highlights that the investments and operations in the telecommunications sector of the group owned by the Xavier Niel family span 26 countries across Europe and Latin America. The group has 139 million subscribers, 45,000 employees, €24 billion in annual turnover and over €9 billion in annual EBITDA. Its operations include Iliad, Salt, Monaco Telecom, Eir, Tele2 and Millicom. Xavier Niel is also “a major investor in the European technology and innovation landscape, with around €4 billion invested since 2022 in European artificial intelligence projects”. Deutsche Bank maintains its positive outlook on Vodafone shares with a ‘buy’ recommendation. The target price remains unchanged at 150 pence.