Vodafone rejects €11bn bid for Italian unit

The London-listed group said it had received a "highly preliminary" approach from Iliad, which is controlled by French billionaire Xavier Niel, and private equity firm Apax Partners to acquire 100% of Vodafone Italy.

No value was given, although the Financial Times - which first reported the bid - said Iliad had offered more than €11bn, which represents a valuation of roughly seven times earnings before interest, taxes, depreciation and amortisation.

Rejecting the approach, Vodafone said it was not in the best interests of shareholders and that it was instead focused on delivering shareholder value "through a combination of its organic growth strategy over the medium-term and ongoing portfolio optimisation".

It added that it was continuing to "pragmatically" pursue several value accretive in-market consolidation opportunities in Europe, including Italy.

Vodafone has around 28% of the Italian market, which is its third-biggest revenue market after Germany and the UK. In contrast, Iliad has a market share of just 8% after launching in the country in 2018.

A tie-up with Vodafone Italy would have propelled Iliad above Telecom Italia, which is itself subject to a takeover approach from KKR. The US buyout giant has offered €0.505 a share in cash, giving the company - which has around €23bn of debt - an equity value of €10.7bn.

As at 1500 GMT, shares in Vodafone were ahead early 1% at 140.32p.

Niel took Iliad private last year after acquiring the 30% of the company he did not already own for €3.1bn.