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French telecommunications operator Iliad said on Wednesday that Vodafone VOD.L had rejected its proposal to bring their operations together in Italy.
Iliad, Free’s parent company, submitted a proposal to Vodafone in December to merge their Italian activities into a new equally owned joint venture. The proposal valued Vodafone Italia at 10.45 billion euros with a cash payment of 6.5 billion euros and a shareholder loan of two billion euros.
Iliad indicated on Wednesday that it had further improved this offer, with a cash amount of 6.6 billion euros.
“The Vodafone group has refused this new offer,” Iliad said in a press release.
“The Iliad Group maintains that the merger of these two companies would provide, by far, the best solution to support the Italian telecommunications sector,” he adds.
A Vodafone spokesperson said on Wednesday that the group was no longer in negotiations with Iliad but continued to discuss with other parties for its activities in Italy.
“We said in December that we were exploring options with several parties in Italy. We are no longer in talks with Iliad, but our discussions with other parties continue.”
On the London Stock Exchange, the British group’s shares fell by more than 3% in the morning.
Under pressure to improve Vodafone’s profitability, chief executive Margherita Della Valle is evaluating options for the Italian business.
Vodafone is also reportedly evaluating a potential combination of its assets with Fastweb, the Italian unit of Swisscom SCMN.S , according to people familiar with the matter.
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
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(Written by Diana Mandiá in Gdansk and Paul Sandle in London; Blandine Hénault for the French version)