The founder and majority shareholder of Iliad, Xavier Niel, has decided to strengthen his control over the telecom group by launching a share buyback operation. The aim is to take the share off the stock market.

This simplified takeover bid, aimed at holding all the shares not held, is set at 182 euros per share, i.e. approximately 60% above the last price. This announcement caused Iliad's share price to rise by 61% on the Paris stock exchange in the early morning hours of Friday 30 July.

The operation was initiated by HoldCo II, a company controlled by Xavier Niel. He holds, directly and indirectly, 70.6% of the company's capital and 78.7% of its voting rights.

Xavier Niel and Iliad's senior executives and historical shareholders, who have undertaken to tender their shares to the offer, hold directly and indirectly 74.9% of the capital and 83.6% of the voting rights of the group. "At the end of the offer, if the number of shares not tendered to the offer does not represent more than 10% of Iliad's capital and voting rights, HoldCo II will ask the Autorité des marchés financiers to implement a squeeze-out procedure," the company said in a statement.

Founded in 1999, Free's parent company has operations in France, Italy and Poland. Europe's sixth-largest mobile operator by subscribers, Iliad has 42.7 million subscribers and generated revenues of €5.9 billion in 2020.

"Iliad's new phase of development requires rapid transformation and significant investment, which will be easier to achieve as an unlisted company. Our ambition for Iliad is to accelerate its development to make it a leader in telecommunications in Europe," Xavier Niel said in a statement.

This is not an isolated operation in the telecom sector. Indeed, last January, Patrick Drahi, founder and majority shareholder of the Altice group, also delisted his European group (SFR, RMC, BFMTV...). The operation was intended to make it easier for Altice Europe to implement its strategy and to focus on long-term objectives, without having its quarterly performance scrutinised by the markets.

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Source : Challenges

On the evening of the second day of the auction, the State is already assured of pocketing at least €2.65 billion for the allocation of 5G frequencies in France.

Organised by Arcep, the auction covers eleven 10 MHz blocks coveted by Bouygues Telecom (Bouygues), Orange, Free (Iliad) and SFR (Altice).

Each of the 10 MHz blocks, put up for sale at a minimum price of €70 million, reached a new price of €114 million on the evening of 30 September. It had already risen to 90 million on the first day of the auction the day before. The Arcep specifies that the process will continue on Thursday.

Having already raised 1.4 billion euros during the non-auction allocation of four 50 MHz blocks - one per operator - the amount reached by the auction guarantees 2.65 billion euros to the State for the moment. Orange is still asking for five blocks, followed by SFR and Bouygues Telecom with three blocks each, then Iliad with just two blocks.

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Source : Challenges

The deployment of 5G has become an international geopolitical issue. And the spokesman for the Chinese embassy in France is concerned about "recent reports in several French media that the competent French authorities are considering taking restrictive measures against Huawei in the deployment of 5G in France".

It recalls that the French President and senior officials have stated in this press release that, with regard to 5G, "France would not take discriminatory measures against any specific country or company, nor would it exclude Huawei".

These fears of espionage are unfounded for China. "In reality, Huawei's 5G equipment is totally reliable and has never presented any technical or security risks, nor left any 'back door'," said the spokesman.

China says it is counting on France "to take concrete action and create an open, transparent and non-discriminatory business environment for companies from all countries, including China".

Last Friday, Orange announced that it had selected European groups Nokia and Ericsson as equipment suppliers for the deployment of a 5ᵉ generation mobile network in metropolitan France.

Within the French telecoms sector, the prevailing sentiment is that the French authorities want to ban Huawei from the 5G market but will not say so publicly.

For its part, the European Commission has published its directives refusing to exclude the Chinese group, while allowing member countries to ban equipment manufacturers they deem to be "high risk".

Several operators say they fear that excluding Huawei will lead to delays and additional costs in the deployment of 5G.

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Source : Challenges