(CercleFinance.com) – iliad announced on Monday that it had submitted to Vodafone a proposal aimed at joining forces in Italy, a project which would take the form of a merger between iliad Italia and Vodafone Italia.
This offer – which benefits from the unanimous support of the iliad board of directors and its main shareholder Xavier Niel – would value Vodafone Italia on the basis of 10.45 billion euros, i.e. a ‘significant’ premium in terms of multiple of results, indicates the group.
According to the French telephone operator, the proposed merger would create the most innovative challenger in an Italian market which includes five mobile network operators and more than ten fixed broadband service providers.
As part of the transaction, iliad would also have a purchase option on Vodafone’s stake in the new entity created, which could allow it to acquire a block of 10% of the capital each year.
In the event that iliad chooses to exercise all of the purchase options, the operation would generate an additional amount of 1.95 billion euros in cash for Vodafone.
The combined entity is expected to generate revenue of around €5.8 billion for an ‘EbitdaaL’ – a key measure of telecoms sector profitability – of around €1.6 billion over the year. The financial year is due to end in March 2024.
The transaction should also generate annual synergies of more than 600 million euros in terms of operational costs and investment expenses, assures iliad.
At this stage, Vodafone has not officially reacted to Iliad’s proposal, but its stock price rose by more than 2% in London on Monday in the first trades, illustrating the favorable reaction of investors to this proposed merger.
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