French billionaire Xavier Niel snapped up a 2.5 per cent stake in Vodafone this morning, heralding much-needed growth for the struggling FTSE 100 firm.
His investment firm Atlas Investissement said in a filing that it saw “opportunities to accelerate both the streamlining of Vodafone’s footprint and the separation of its infrastructure assets,” including cost cutting and a greater push for profitability.
Niel, who is the founder and owner of the telecoms giant Iliad, confirmed that he backed Vodafone’s strategy for consolidation in the UK and Italy, which has also been pushed by Swedish activist investor Cevian Capital.
Enders Analysis’ Karen Egan told City A.M. that Niel’s swoop for Vodafone was undoubtedly driven by his firm’s failed bid to buy Vodafone’s Italian unit for more than €11bn (£9.6bn) in February.
She said this, combined with shareholder frustration, was a key driver for the businessman, who also has an expansive portfolio across Europe and Africa.
CCS Insight analyst Kester Mann said the grab shows that there remains an appetite from Vodafone to keep pushing for UK mergers.
“The much-discussed tie-up with Three in the UK is one possible scenario, but would need to overcome stringent regulatory hurdles,” he told City A.M.
Vodafone and Atlas declined to add any further comment on the move.
Niel is the second French billionaire to invest in UK telecoms in recent months after Patrick Drahi’s Altice built up an 18 per cent stake in BT.
The acquisition was cleared by the business secretary last month after a review under the National Security and Investments Act. (NSIA).
Vodafone shares were up two per cent this morning, but are still down six per cent in the year to date.