French telecoms billionaire Xavier Niel has become Vodafone's largest shareholder after acquiring a 16% stake for £4.4bn through his family investment vehicle Vega. The purchase follows the sale of Emirati telecoms group e&'s entire shareholding, which it first took in 2022 for £3.3bn, at 112.5p per share.
Niel's Investment Strategy
Niel, founder of Iliad, paid a 15% premium to Vodafone's share price on Thursday. Vega, set up solely to house the Vodafone stake, intends to be a long-term minority shareholder. Niel previously held a 2.5% stake in Vodafone through Atlas Investissement, which he sold in 2022. He described Vodafone as a "compelling investment opportunity," stating: "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."
Vodafone's Recent Restructuring
Vodafone has restructured recently, selling its Italian and Spanish operations and its 50% stake in its Dutch joint venture, while merging with Three to become the UK's largest mobile operator. In May, it announced plans to acquire CK Hutchison's 49% stake in VodafoneThree for full control.
Niel's Background and Potential Impact
Niel, worth $15.5bn according to Forbes, has built telecoms businesses in France, Italy, Poland, and Iceland. His partner of over 15 years is Delphine Arnault, daughter of LVMH founder Bernard Arnault. Unlike e&, which held a board seat and could nominate a second if its stake exceeded 20%, Niel currently has no board representation.
Carl Murdock-Smith, a telecoms analyst at Citi, noted Niel's record as an active shareholder, referencing his 19.8% stake in Tele2 in 2024, which led to a 15% workforce reduction. "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. He added that investors will watch for board representation requests from Niel.
A spokesperson for Niel said the transaction was solely a share purchase with no governance package attached. "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.
Other Interests and Market Reaction
Niel's other interests include the French newspaper Le Monde, which he saved from bankruptcy before selling almost all shares for €1 to the Fund for Press Independence. Vodafone shares jumped 12% on Friday.
