Odd call

12 November 2019 By Ed Cropley Follow @edwardcropley

Xavier Niel’s French telecom group will spend 1.4 bln euros to buy out minority shareholders at a premium. At the same time, the entrepreneur is underwriting a share issue to raise the same amount. It looks a convoluted and costly way for the billionaire to lift his stake.

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Iliad announced plans on Nov. 12 to buy back 19.7% of the company’s share capital at a cost of 1.4 billion euros.

The French mobile operator said it would offer 120 euros a share, representing a premium of 38% to the company’s volume-weighted average share price over the previous three months.

Iliad said it would finance the buyback through a share issue representing the same amount as the buyback offer, guaranteed in full by founder Xavier Niel.

Niel, who already owns 52% of the company, will not take part in the buyback. He told analysts that he was disappointed by the company’s recent share price performance and wanted to increase his exposure.

Iliad shares jumped 18% to 112.2 euros by 0928 GMT on Nov. 12, their highest since January.

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