By City A.M. Reporter
Iliad said on Monday it had submitted a proposal to Vodafone to merge their Italian businesses, adding the project had the unanimous support of its board of directors.
“The merged business would be expected to generate revenues of around £5bn and EBITDA of approximately £1.38bn (€1.6bn) for financial year ending March 2024,” Iliad said in a statement.
Following the statement, Vodafone’s share price went to the top of FTSE 100, up by more than 4.68 per cent after the open, to 67.75p.
Under the plan, Vodafone would receive 50 per cent of the share capital of the newly merged business, together with a cash payment of €6.5bn and a shareholder loan of €2bn to ensure long-term alignment, Iliad added.
Vodafone said last month it was reviewing options for its Italian operation, the last of three troubled European markets its boss had vowed to fix.
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Iliad offered €11.25bn to buy Vodafone Italy outright last year but was rebuffed.
It said its new joint-venture proposal, which Reuters reported on Friday, implied an earnings multiple of 7.8 times, which was higher than the 7.1 times multiple offered last year.
Vodafone is also evaluating a potential combination of its assets with those of Swisscom’s Italian unit Fastweb, according to recent reports.
Vodafone’s shares rose 4.3% in early deals on Monday.
Reuters – Benoit Van Overstraeten and Paul Sandle
