- Wednesday, October 16, 2024
Shares of Vodafone Group experienced a significant boost of 4.6% following an announcement from Iliad Group. Iliad has presented a proposal to merge their Italian businesses with Vodafone Italia, valuing the latter at an impressive €10.45 billion ($11.38 billion).
As part of this plan, the two telecom giants aim to establish a new jointly owned company that will integrate their Italian operations. Iliad has confirmed that its board and main shareholder, Xavier Niel, fully support this proposal. On the other hand, Vodafone has yet to release a statement regarding this potential deal and has not responded to requests for comment.
Under the terms of the proposal, Vodafone would receive €6.5 billion in cash along with a €2.0 billion shareholder loan. This arrangement would result in Vodafone's share of the new business being valued at €1.95 billion, according to Iliad.
Meanwhile, Iliad would receive €500 million in cash and a €2.0 billion shareholder loan. Additionally, it would have the option to purchase 10% of the joint venture from Vodafone annually at a predetermined price.
The merged entity is projected to achieve noteworthy financial results, with expected revenues of €5.8 billion and earnings before interest, taxes, depreciation, and amortization after leases of €1.6 billion for the fiscal year ending in March 2024.
Despite today's positive market response, Vodafone shares have faced a challenging year thus far, with a decline of 20%.
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