Deal: Iliad CEO Xavier Niel Bids To Take Firm Private
The CEO of French telecoms giant Iliad S.A. has made a bid to take the company private by buying out the shares he doesn’t own. Xavier Niel by name, he already controls the majority of the company’s shares and has sought out to buy the minority he doesn’t own.
- Niel himself owns roughly 71% of Iliad’s share capital. Additionally, a few other shareholders owning roughly 4% of the company have agreed to tender their shares in Niel’s offer. It means he just has to pony up the cash for the remaining 25%, and he’s made an offer with a high premium.
- Niel has bid to pay 182 euros per share for the rest of the shares of Iliad S.A. The bid represents a 61% premium to the company’s closing share price the day before it was announced and a 53% premium to the company’s average share price over the past month, it said.
- Moving to take his telecoms empire private represents a major change of strategy for Niel, who started it about two decades ago and took it public way back in 2004. It seems Niel is taking advantage of the low valuations of European telecom firms in this era that makes it cheaper to buy out stakes.
- Niel’s move mirrors that of a fellow French telecom honcho, Patrick Drahi, who bought out his Altice Europe telecoms giant from the public markets this January.
- In a statement, Iliad CEO Thomas Reynaud said the company’s board “welcomes” Niel’s offer, implying that it’s likely to pull through. “I’m very excited at the idea of starting a major new chapter in Iliad’s history, with the full support of Xavier Niel and the Group’s 15,000 employees,” he said.
- Iliad shares (EPA: ILD) rose 61% on the French securities market on Friday when the bid was announced. It implies that shareholders are overwhelmingly expecting the bid to pan out.
- Given Iliad’s current market cap of about 11 billion euros ($13bn), Niel would need around 2.8 billion euros ($3.3bn) to take his telecoms empire private. With an estimated (Forbes) net worth of $7.2bn and lots of connections to get financing, we deduce that won’t be a problem for him.