Iliad's Offer to Acquire Vodafone Italia: Impact on Unieuro and Future Scenarios

For the management of Unieuro, Iliad is the ideal reference shareholder. Low profile, no public interference in management choices. Yet the French TLC group founded by Xavier Niel is the largest shareholder of Unieuro with 12.2%, one and a half times the share of the ‘founder’ Giuseppe Silvestrini.

Iliad had purchased the relative majority stake in Unieuro in April 2021 when the price reached highs around 25 euros. Today it is worth less than half even if Iliad has received important dividends.

What could change in Forlì if Iliad managed to acquire the activities of Vodafone Italia? Before starting with the hypotheses, let’s see what is certain:

Vodafone Group wants to exit Italy. The CEO of Vodafone herself admitted that the English group is looking for solutions to reduce its commitment in three markets with an unsatisfactory performance and Italy is one of these and the rumors of an interlocution with Swisscom which owns Fastweb in Italy are well founded.

Iliad has identified Vodafone as the ideal partner in Italy. It owns the infrastructure, has a solid presence in the business market, manages the networks of a series of third-party operators (first and foremost Poste Italiane). In short, it has everything except profitability, especially in the consumer market. Iliad has those: 10.1 million as of June 30th. It is no coincidence that Xavier Niel had offered 11.5 billion to acquire Vodafone Italia.

The presence in Unieuro offers Iliad an important although no longer decisive side with its network of almost 400 points of sale between its own and affiliates.

The latest offer

Iliad proposes to create a New Company to which both Vodafone and Iliad would contribute their Italian activities. Vodafone Group would receive 50% of this new company and 6.5 billion in cash. Iliad would hold the remaining 50% and inject 2 billion in fresh money. Iliad therefore values Vodafone Italia at 7.8 times its Ebitda (1.34 billion euros for the 2024 financial year according to the broker consensus). Iliad would also have a call option on Vodafone’s stake in NewCo with the right to acquire 10% of NewCo’s share capital every year.

Three scenarios

In the press release with which Iliad announced the offer, there is no mention of Unieuro. We can therefore only make hypotheses.

Iliad leverages its presence in Unieuro to ensure the success of the New company. The Unieuro pvts would therefore become a battleship in Tim’s attack.

Being able to count on Vodafone’s network of shops and corners, the New company would not need the Unieuro network and the participation would become only financial and no longer strategic, available for sale to the market or to third parties.

Nothing changes as Iliad is above all interested in Vodafine’s infrastructure and its presence in the B2B world.

Which of these scenarios will materialize if Iliad’s offer convinces the parent company’s management? The market does not seem to believe that there are threats to Unieuro nor does it expect the French participation to be put on the market. The day after the announcement of Iliad’s offer, Unieuro shares fell slightly but are still 20% above the lows reached in September.

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Iliad’s Offer to Acquire Vodafone Italia: Impact on Unieuro and Future Scenarios

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