Iliad shares skyrocket as Xavier Niel offers to buy out own company

3 Aug 2021

Xavier Niel. Image: Olivier Ezratty via Wikmedia Commons

Eir owner Xavier Niel is looking to take his telcoms business private.

Xavier Niel, founder and 71pc owner of French telco Iliad, has launched a bid to buy out the company’s remaining shares and take it private.

The tender for the remaining capital of Iliad would offer shareholders €182 a share, a premium of 52pc over the average of the last month and 61pc higher than the closing share price last Thursday (29 July).

Niel is France’s ninth-richest person, according to Forbes’ annual list.

In a statement, he said: “I founded Iliad in 1999 and I’m very proud of what the group has grown into and the value it has created for all of its shareholders. From now on, a new phase of development for Iliad will require quicker transformations and significant investments that will be easier to carry out as a private company. Our ambition for Iliad is to accelerate to become a leader in telecommunications in Europe.”

This is not Niel’s first move to increase control over the company. In late 2019, he financed a €1.4bn share buyback. In taking the company fully private, Niel is following in the footsteps of Patrick Drahi, France’s seventh-richest person. In January, Drahi bought out all remaining shares of Altice Europe.

According to the Financial Times, the move signals that Niel thinks the market is undervaluing Iliad. Before Friday, the company’s shares had fallen by more than 34pc since the start of the year. Shares jumped as much as 62pc last week to Niel’s offer price of €182.

Thomas Reynaud, CEO of Iliad, said the company’s management team “welcomes this further demonstration of Xavier Niel’s commitment to the group”.

“This operation will secure Iliad’s strategic independence and help us pursue our business development plan based on major investments in 5G and fibre. It’s a question of growth, trust and confidence. I’m very excited at the idea of starting a major new chapter in Iliad’s history, with the full support of Xavier Niel and the group’s 15,000 employees.”

Iliad is one of the largest telcos in Europe with presence in numerous countries, having made bids for Poland’s Play last September and UPC Poland this week. Ireland’s Eir is jointly owned by Iliad and Niel’s private investment firm NJJ Telecom Europe. In 2014, Iliad tried and failed to acquire T-Mobile US.

Xavier Niel. Image: Olivier Ezratty via Wikimedia Commons (CC BY-SA 3.0)

Jack Kennedy is a freelance journalist based in Dublin