Vodafone Group PLC (LSE:VOD) shares jumped 10% to 107.95p after French telecoms billionaire Xavier Niel agreed to buy a 16.2% stake in the FTSE 100 group for £4.4 billion.
Niel’s acquisition vehicle Vega, wholly owned by the Niel family group, struck a binding deal with Abu Dhabi operator e& to acquire its entire 3.9 billion Vodafone shares.
The shares are priced at £1.104792 each, with e& also set to receive Vodafone’s final dividend of 2.3625 eurocents per share, payable on 30 July.
The transaction will be carried out through off-market block trades by financial institutions for hedging purposes, with physical settlement expected before the end of the year.
Regulatory approvals are still required before the deal can be formally completed, and Vega said it will shortly initiate contact with the UK government over the proposed investment.
Vega 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.
The vehicle reserved the right to revisit that restriction in certain circumstances, including with the agreement of the Vodafone board or if a third party announces a firm offer for the company.
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 track 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 any entities controlled by the family group.
Vodafone confirmed its relationship agreement with e&, originally dated May 2023, has now been terminated following the sale.
Hatem Dowidar, who served on the Vodafone board as e&’s nominee director, resigned with immediate effect upon announcement of the deal.
e& had built its stake in Vodafone from 2022 and had remained the company’s largest shareholder until agreeing to sell the holding to Niel’s Vega vehicle.
The deal marks a significant shift in Vodafone’s shareholder structure, with Niel now set to become the company’s single largest investor once the transaction clears all necessary approvals.