Vodafone Group PLC (LON: VOD) shares jumped 11.09% to 108.60p after French telecoms billionaire Xavier Niel agreed to acquire e&’s entire 16.2% stake in the FTSE 100 telecoms group for £4.4 billion. The deal will make Niel the largest shareholder in Vodafone.
Vega, an acquisition vehicle wholly owned by the Niel family group, has entered into a binding agreement with Abu Dhabi-based e&, formerly known as Etisalat Group, to acquire approximately 3.9 billion Vodafone shares.
As part of the transaction, e& will also receive Vodafone’s final dividend of 2.3625 eurocents per share, payable on 30 July.
The shares are expected to be acquired through off-market block trades conducted by financial institutions for hedging purposes, with physical settlement anticipated by the end of the year once the necessary regulatory approvals have been secured.
Vega said it intends to contact the UK government shortly regarding the proposed investment.
The acquisition vehicle described the purchase as a long-term strategic minority investment and confirmed under Rule 2.8 of the UK Takeover Code that it does not currently intend to make an offer for the whole of Vodafone.
However, it reserved the right to set that restriction aside in certain circumstances, including with the agreement of Vodafone’s board or if a third party announces a firm offer for the company.
Niel said Vodafone represented a compelling investment supported by high-quality assets, strong brands and a diversified geographical footprint.
He added that the group’s simpler and more focused structure left it well positioned for a new phase of growth.
Niel also pointed to his record as a minority investor in listed telecoms companies including Tele2 and Millicom, saying Vega is prepared to contribute deep sector expertise as a long-term European anchor investor.
The Niel family group is described as the largest private investor in European telecoms, with operations spanning 26 countries, 139 million subscribers and annual revenues of €24 billion through assets including iliad, Salt, Monaco Telecom and Eir.
The investment will be fully financed by Niel and financial institutions, with no recourse to other entities controlled by the family group.
Vodafone separately confirmed that its relationship agreement with e&, dating from May 2023, has been terminated.
Hatem Dowidar, who joined the Vodafone board as e&’s nominee director, has resigned with immediate effect.
e& began building its stake in Vodafone in 2022 and had been the company’s largest shareholder before agreeing the sale.
