The French telecoms billionaire Xavier Niel has become Vodafone’s largest shareholder after buying a 16% stake for £4.4bn.
On Friday, the Emirati telecoms group e&, which first took a stake worth £3.3bn in Vodafone in 2022, announced the sale of its entire shareholding for 112.5p a share.
Niel, who founded the telecoms company Iliad, has bought the stake through his family investment vehicle Vega at a 15% premium to Vodafone’s share price on Thursday.
Niel said that Vega, which has been set up solely to house his stake in Vodafone, intends to be a long-term minority shareholder in the telecoms company.
In recent years, Vodafone has restructured its business – including selling its Italian and Spanish operations and its 50% stake in its Dutch joint venture – as well as merging with Three to create the UK’s largest mobile operator.
Niel, who had previously sold the 2.5% stake he took in Vodafone through his investment vehicle Atlas Investissement in 2022, said Vodafone is now a “compelling investment opportunity”.
“As a simpler, more focused business, Vodafone is ready for a new phase of growth and is well placed to unlock substantial untapped value across its European and African operations,” he said. “We are confident Vodafone can deliver sustainable growth and strong cashflow generation over the long term and – as an anchor investor based in Europe – we are ready to contribute our deep sector expertise and operational knowhow to its future success.”
In May, Vodafone said it would acquire CK Hutchison’s 49% stake in their VodafoneThree joint venture to take full control of the company.
Niel, who has built telecoms businesses in France, Italy, Poland and Iceland, is estimated to be worth $15.5bn (£11.5bn) by Forbes.
His partner of more than 15 years is Delphine Arnault, the daughter of France’s richest man, Bernard Arnault, and an heiress to the vast luxury conglomerate LVMH that made her father a $150bn fortune.
E& had one seat on Vodafone’s board, with the right to nominate a second if its shareholding ever exceeded 20%, but at this point Niel does not have representation.
Carl Murdock-Smith, a telecoms analyst at Citi, said Niel has a record of being an active shareholder and could push for changes including job cuts.
Months after taking a 19.8% stake for $1.3bn in Tele2 in 2024, which made him the Swedish telecoms company’s biggest shareholder, it announced it was cutting 15% of the workforce.
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“We believe investors will look to what happened at Tele2 after a Niel investment vehicle became the largest shareholder – such as a 15% workforce reduction plan – as a potential framework of what to expect,” Murdock-Smith said in a note to clients. “Investors will be interested to see what level of board representation is requested by Mr Niel.”
A spokesperson for Niel said that the transaction on Friday was only a share purchase, and there was no governance package attached to the deal.
“As a significant long-term shareholder, assuming regulatory approvals are obtained, we would expect an appropriate level of engagement with the company over time,” the spokesperson said.
Niel’s other business interests include the French newspaper Le Monde, which he saved from bankruptcy, although two years ago he sold almost all of his shares for €1 to the Fund for Press Independence in a restructure to safeguard the independence of the publication.
Shares in Vodafone jumped 12% on Friday.