Vodafone's shares surged by nearly 11% on Friday, reaching a high of 108.5p in early trading on the London Stock Exchange, following news that French telecoms billionaire Xavier Niel had acquired a substantial stake in the company, making him its largest shareholder. This significant transaction valued at £4.4 billion represents a 15% premium over Vodafone's closing price of 97.76p on the previous day, with Niel's investment vehicle, Vega, purchasing e&'s entire 16.2% holding.
The deal marks a significant shift in Vodafone's ownership structure and brings an end to the relationship agreement between the British company and Emirates Telecommunications Group (e&) that has been in place since 2023. As a result, Hatem Dowidar, e&'s board representative, has resigned from Vodafone with immediate effect. Xavier Niel, founder of French telecom giant Iliad and already a long-term Vodafone shareholder, expressed optimism about the company's future, stating that Vodafone is entering 'a new phase of growth' under the leadership of chief executive Margherita Della Valle.
Niel highlighted Vodafone's appeal as an investment opportunity, citing its 'quality assets, strong brands, leadership positions and diversified geographic footprint.' He noted that, with a 'simpler, more focused business,' Vodafone is well-positioned to unlock 'substantial untapped value' across its European and African operations. Vega has reaffirmed its intention to be a long-term shareholder and supportive partner, explicitly stating it has no plans to launch a takeover offer for the company.
This development marks another key chapter in Vodafone's ongoing transformation under Ms Della Valle's leadership, which has seen the company divest operations in Spain and Italy, refocusing its core business on key markets such as the UK, Germany, and Africa. The strategic overhaul also includes the recent completion of the creation of VodafoneThree, Britain’s largest mobile network. The change in major shareholders replaces a previous investor whose stake had drawn political scrutiny with one of Europe's most recognised telecoms entrepreneurs.
While Niel has held a smaller stake in Vodafone since 2022, this enlarged investment will require regulatory approval. Dan Coatsworth, head of investment analysis at AJ Bell, noted that the UK government previously scrutinised e&'s investment in Vodafone on national security grounds and similar concerns may arise with Niel's increased stake, given past investigations into significant foreign investments in critical infrastructure companies like BT. The transaction is expected to finalise after all necessary regulatory approvals are secured.