Vodafone Group PLC (LSE:VOD) shares advanced 10% to 107.95p after French telecoms billionaire Xavier Niel agreed to buy e&'s entire 16.2% stake in the telco for £4.4 billion, a deal that will make him the largest shareholder in the FTSE 100 group.
Vega, an acquisition vehicle wholly owned by the Niel family group, has entered a binding agreement with the Abu Dhabi operator to acquire its 3.9 billion shares at £1.104792 each.
e&, the Abu Dhabi operator formerly known as Etisalat Group, will also receive Vodafone's final dividend of 2.3625 eurocents per share, payable on 30 July.
The shares will be acquired through off-market block trades by financial institutions for hedging purposes, with physical settlement expected by the end of the year once regulatory approvals are obtained.
Vega said it will shortly initiate contact with the UK government over the proposed investment.
The vehicle described the purchase as a long-term, strategic minority holding and confirmed under Rule 2.8 of the Takeover Code that it does not intend to make an offer for the whole of Vodafone.
It reserved the right to set that restriction aside in certain circumstances, including with the agreement of the Vodafone board or if a third party announces a firm offer.
Niel said Vodafone is a compelling investment underpinned by quality assets, strong brands and a diversified footprint, adding that the simpler, more focused business is ready for a new phase of growth.
He pointed to his record as a minority investor in listed companies including Tele2 and Millicom, saying Vega is ready to contribute deep sector expertise as an anchor investor based in Europe.
The Niel family group is the largest private investor in European telecoms, with businesses spanning 26 countries, 139 million subscribers and €24 billion of annual revenues through assets including 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 confirmed 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& built its stake from 2022 and had been Vodafone's largest shareholder before agreeing the sale.
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