In a major development, French telecom operator Iliad announced on Wednesday that Vodafone had turned down an enhanced proposal for merging their respective Italian businesses. In response, Iliad asserted its commitment to fiercely pursuing market share as an independent operator.
Vodafone confirmed the conclusion of discussions with Iliad, acknowledging the rejection of the sweetened merger offer. Despite this setback, Vodafone indicated its ongoing efforts to explore alternative options for a business deal in Italy. The announcement had an immediate impact on Vodafone’s shares, causing a 3.3 percent decline, Reuters news report said.
Iliad had initially proposed the merger of their Italian units in December, envisioning a strategic alliance that would leverage its rapidly growing consumer base with Vodafone’s established presence in the competitive Italian market, particularly in the business segment.
Responding to the rejection, Iliad emphasized its determination to thrive as a standalone operator. In a bid to sweeten the deal, Iliad increased its offer by 100 million euros, reaching a total of 6.6 billion euros in cash. Additionally, Vodafone was slated to receive a 2 billion euro shareholder loan as part of the proposed arrangement.
The revised terms outlined that Iliad would have received 400 million euros in cash, a reduction of 100 million euros from the initial proposal. Despite the setback, Iliad defended its position, stating, “The Iliad Group is confident that the offer presented was the best possible business combination to benefit a struggling Italian market and telecommunications industry.”
Vodafone, for its part, maintained its stance on seeking potential deals in Italy, with sources indicating that discussions were ongoing with various parties. Among the alternatives being explored was a potential deal with Swisscom’s Fastweb Italian unit.
In a statement on Wednesday, a Vodafone spokesperson affirmed, “We are no longer in talks with Iliad, but our discussions with others continue.”