Vodafone Shares Surge as French Billionaire Niel Acquires 4 Billion Pound Stake from Abu Dhabi Operator

Vodafone Group PLC shares rose 10% to 107.95p following confirmation that French telecommunications billionaire Xavier Niel has agreed to acquire the entire 16.2% stake held by Abu Dhabi operator e& for £4.4 billion. The transaction positions Niel as the largest shareholder in the FTSE 100 telecommunications company.

Vega, an acquisition vehicle wholly owned by the Niel family group, has entered into a binding agreement with e& to purchase 3.9 billion shares at a price of £1.104792 per share. The deal includes transfer of Vodafone’s final dividend of 2.3625 eurocents per share, which is scheduled for payment on 30 July.

The acquisition will be executed through off-market block trades conducted by financial institutions for hedging purposes. Physical settlement is anticipated by the end of the year, subject to obtaining necessary regulatory approvals. Vega has indicated it will initiate contact with the UK government regarding the proposed investment in the near term.

The acquisition vehicle has characterised the purchase as a long-term, strategic minority holding. Under Rule 2.8 of the Takeover Code, Vega has confirmed it does not intend to make an offer for the entirety of Vodafone. However, the company has reserved the right to set aside this restriction under certain circumstances, including with the agreement of the Vodafone board or should a third party announce a firm offer.

Niel has described Vodafone as a compelling investment opportunity supported by quality assets, strong brands and a diversified footprint. He noted that the simpler, more focused business is positioned for a new phase of growth. The investor pointed to his track record as a minority investor in listed companies including Tele2 and Millicom, stating that Vega is prepared to contribute deep sector expertise as an anchor investor based in Europe.

The Niel family group represents the largest private investor in European telecommunications, with operations spanning 26 countries, 139 million subscribers and generating €24 billion in annual revenues. The portfolio includes assets such as iliad, Salt, Monaco Telecom and Eir.

The investment will be fully financed by Niel and financial institutions, with no recourse to entities controlled by the family group. Vodafone has confirmed that its relationship agreement with e&, dated May 2023, has been terminated. Hatem Dowidar, who joined the Vodafone board as e&’s nominee director, has resigned with immediate effect.

e&, formerly known as Etisalat Group, built its stake from 2022 and had been Vodafone’s largest shareholder prior to agreeing the sale.