PARIS (Reuters) – Iliad has submitted to the Vodafone group a proposal to merge their activities in Italy into a new joint venture, the French telecoms group announced on Monday.
The proposal values Vodafone Italia at 10.45 billion euros and would represent “a significant premium in terms of multiple of EBITDAaL”, the operating result before depreciation of fixed assets, Iliad indicates in a press release.
“Based on Vodafone Italia’s estimated EBITDAaL of €1.34 billion for the financial year 2024, the proposed transaction implies an EBITDAaL multiple of 7.8x.”
Iliad was refused last year a buyout offer of 11.25 billion euros for these activities, representing an EBITDAaL multiple of 7.1x, lower.
Reuters reported Friday that Iliad has since been working on a new joint venture proposal.
Under the proposal, the British group would obtain 50% of the share capital of the new joint venture, a cash payment of 6.5 billion euros and a shareholder loan of 2.0 billion euros “to ensure alignment long-term”.
Iliad Italia is valued at 4.45 billion euros and the group would obtain in this operation a cash payment of 500 million euros and a shareholder loan of 2.0 billion euros.
The French group would also have a purchase option on Vodafone’s stake in the joint venture and could acquire a block of 10% of the share capital each year.
The offer, says Iliad, benefits from the unanimous support of the group’s board of directors and its main shareholder Xavier Niel.
Under pressure to improve Vodafone’s profitability, Chief Executive Margherita Della Valle said last month the British group was exploring options for its operations in Italy, the last of its three struggling European markets.
Vodafone is also evaluating a potential combination of its assets with Fastweb, the Italian unit of Swisscom, according to press reports.
On the London Stock Exchange, Vodafone shares rose by more than 6% in the morning.
The British group recently announced two major operations, one in Spain where it will sell its local subsidiary for five billion euros and the other in the United Kingdom, where it will merge its mobile activities with those of CK Hutchison.
(Written by Kate Entringer, edited by Blandine Hénault)
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