Xavier Niel is launching a public tender offer for Iliad shares, which will lead to the delisting of the company from the Paris stock market. The operation will be carried out via HoldCo II, a company controlled by Niel, who already owns directly and indirectly 70.6 percent of Iliad’s share capital and 78.7 percent of voting rights.
The offer price has been set at EUR 182 per share, a 61.0 percent premium on the most recent closing share price, and a 52.7 percent premium on the 30-day average weighted price. The offer period will run from 08 to 23 September, after which HoldCo II will implement a squeeze-out procedure for any remaining shares.
Niel, who founded Iliad in 1999, said that the group was entering a new phase that required "rapid changes and major investments which will be easier to undertake as an unlisted company". The announcement coincided with the release of estimated financial results, covering the group’s performance in the first half of 2021.
Iliad said that its service revenues rose 6.3 percent year-on-year in the three months to June, on a pro forma like-for-like basis. This compares with the 4.8 percent increase recorded in the previous quarter, with the contribution of Polish subsidiary Play calculated as if it had been consolidated at the start of 2020.
On a reported basis, the group's service revenues rose 30.4 percent to EUR 1.76 billion, including EUR 319 million from the Polish subsidiary. Iliad’s core French market saw service revenues increase 5.0% to EUR 1.25 million, as growth accelerated in both the fixed segment (+6.0% from +4.4% in Q1) and the mobile operations (+3.7% from +0.3% in Q1).
The free cash flow guidance for France (EBITDA minus capex) has been revised downwards to EUR 600 million, from EUR 900 million previously. This was motivated by the decision to allocate greater investment to the 5G roll-out, the need to secure supply of electronic components for Freebox STBs, and, to a lesser extent, the consequences of greater competitive pressure in the mobile market during the second quarter.
Excluding the consolidation of Polish operator Play, Iliad's EBITDAaL rose by 17 percent year-on-year in the six months to June while operating cash flow (EBITDAaL less capex) was EUR 22 million higher, as larger capex in France partly offset a better financial performance in Italy. On a reported basis, consolidated group EBITDAaL rose 59.5 percent to EUR 1.40 billion in the H1 period, including a EUR 373 million contribution from Play.
Looking at the operational metrics in France, the fixed broadband base grew by 47,000 since March (+43,000 in Q1) to reach 6.81 million, of which 3.32 million were on FTTP lines. Fibre-based customers increased by 247,000 (+268,000 in Q1), as the marketable footprint rose from 21.1 million to 22.7 million during the second quarter.
Free Mobile’s postpaid base declined by 36,000 since March (+6,000 in Q1), for a total installed base of 13.35 million, as ongoing growth in 'Unlimited' 4G/5G connections (+97,000) was not enough to offset a loss in lower-tier subscriptions (-133,000).
