E& offloads Vodafone stake to telecoms tycoon Niel

Middle Eastern telco e& agreed to sell-off its 16.2% stake in Vodafone Group to an investment vehicle owned by Xavier Niel (pictured) for £4.4 billion, a move that will establish the French billionaire as the UK-based operator’s largest shareholder.

E& stated it had agreed the sale of its entire stake in Vodafone for around £1.10 a share, representing a 13% premium on market price. It initially bought a 9.8% stake in 2022, before gradually growing it over the years.

Niel will take the stake through his family run entity Vega, giving the billionaire a substantial interest in Vodafone and adding to his telecoms operations across France, Italy, Poland and Ireland.

He first acquired a 2.5% stake in Vodafone in 2022 through another investment vehicle which was later sold.

On the deal, Niel said: “Vodafone is a compelling investment opportunity, underpinned by quality assets, strong brands, leadership positions and a diversified geographic footprint.”

Evolution
E& stated its decision to sell the stake “reflects the natural evolution of its strategic priorities, enabling it to sharpen strategic focus on core businesses while unlocking the value created through this investment”.

It will also relinquish a seat on Vodafone’s board, with its nominee director Hatem Dowidar resigning with immediate effect.

It held a board seat as part of a strategic partnership struck with Vodafone in May 2023.

Despite the stake sale, some elements of the strategic partnership between the pair, including collaboration on procurement, technology and enterprise services, remain in place.

Vodafone confirmed the sale in its own statement, while describing the Niel family group as “supportive, long-term shareholders”.

“They recognise the quality of our diversified operations and have confidence in the new chapter of Vodafone group.”

The sale is subject to regulatory approval. Until cleared, e&’s stake will be held by three financial institutions.

Sudden exit
Kester Mann, director of consumer and connectivity at FDM CCS Insight, described e&’s sale as surprising, sudden and an indication the company is “taking a step back from its strategy to become a global telecom and technology player”.

Mann added Niel has “wreaked havoc” in the French market with Iliad which launched as the fourth operator in 2012, while growing its footprint across Europe.

While a full take-over of Vodafone is not an option, “it will be interesting to see how influential he wishes to become. His strong ambitions in AI and cloud services could support Vodafone’s enterprise strategy,” Mann added.