‘France’s answer to Steve Jobs’ buys 2.5% stake in Vodafone

Investment vehicle of tech disruptor Xavier Niel cites chance to spur ‘streamlining’ of UK telecoms group

The French telecoms billionaire Xavier Niel has acquired a 2.5% stake in Vodafone, citing opportunities to accelerate a “streamlining” of the London-listed group’s business.

Niel, who founded the telecoms company Iliad, has taken the stake through his investment vehicle Atlas Investissement, which said it was “supportive of Vodafone’s publicly stated intention to pursue consolidation opportunities”.

The 55-year old has spent his career as “the French Steve Jobs”, disrupting the country’s established tech and telecoms incumbents while building an $8bn (£7bn) personal fortune.

Not that he needs the money: his partner of more than a decade is Delphine Arnault, daughter of France’s richest man, Bernard Arnault, and heiress to the vast luxury conglomerate LVMH that made her father a $154bn fortune.

In February, Vodafone’s chief executive, Nick Read, confirmed it was in talks with rivals in its biggest markets. Read has argued that the European telecoms industry needs to consolidate to create more profitable businesses that are more attractive to investors.

That month Vodafone rejected an €11.25bn (£9.8bn) offer from Iliad, also owned by Niel, which operates in France, Italy and Poland, for its Italian operation.

Niel’s other business interests include French newspaper Le Monde, which he saved from bankruptcy, along with two other high profile investors, in 2010. Two years ago he expanded his media portfolio, buying French horse racing paper Paris-Turf, a daily newspaper in the French West Indies and the Nice-Matin newspaper group.

He also has a five-star hotel in the ski resort of Courchevel, and has set up a successful tech school that has no teachers, no books and no fees for 1,000 students. But his business empire is rooted in telecoms.

A few years after receiving a Sinclair ZX81 as a Christmas present, Niel dropped out of education at 19 to create his first business, Minitel, a forerunner of the internet that offered sex-oriented chat services.

While Niel went on to sell off most of his pornography interests, he kept two sex shops which ultimately would lead to a brush with the law and a two-year suspended prison sentence for misuse of company assets.

In the mid-1990s he invested in the first internet provider in France, selling out just before the internet bubble burst in the early ’00s, and went on to create his own company, Iliad.

Iliad is best known for its revolutionary service called Free, which shook up the French market with free internet access, subsequently developed into a hugely successful low-cost broadband and mobile model that Niel has replicated to shake up markets he has entered with his telecoms investments.

Last year, Niel moved to take Iliad private because of the “high volatility of the telecoms stock market in general and Iliad’s share price in particular”, according to group chief executive Thomas Reynaud.

Niel joins the French-Israeli billionaire Patrick Drahi in targeting the UK telecoms market. Last year, Drahi built an 18% stake in BT, making him the company’s largest investor. In August, the UK government ruled that the stake did not pose any national security concerns.

Sweden’s Cevian is another activist investor that has taken advantage of the weak performance of Vodafone shares, which have almost halved since 2018, building up a stake in January.

In May, the United Arab Emirates’ biggest telecoms provider, e&, bought a 9.8% stake in Vodafone.


Mark Sweney

The GuardianTramp

Related Content

Vodafone buys majority stake in Ghana phone group for £450m

Mobile use rising by 50% a year in African nation and only a third of people have a phone

Richard Wray

03, Jul, 2008 @11:01 PM

Article image
Vodafone confirms talks with Three UK about merger
Combined networks would be Britain’s biggest mobile operator, challenging EE and O2

Mark Sweney

03, Oct, 2022 @11:28 AM

Article image
Vodafone is still not moving the dial for its unhappy investors | Nils Pratley
However much the telecoms company talks itself up it isn’t doing enough to rescue the share price

Nils Pratley

15, Nov, 2022 @7:13 PM

Article image
Vodafone confirms consolidation talks with European rivals
Potential deals include takeover or merger with Three UK, as well as firms in Germany, Spain and Italy

Mark Sweney Media business correspondent

02, Feb, 2022 @11:50 AM

Article image
Vodafone boss to step down after sharp drop in share price
Nick Read will be replaced as CEO by finance chief Margherita Della Valle during search for successor

Mark Sweney

05, Dec, 2022 @11:45 AM

Article image
Vodafone has hung up on Nick Read, now it needs to set a radical tone | Nils Pratley
The complacent conglomerate desperately needs a free-thinking chief executive

Nils Pratley

05, Dec, 2022 @6:42 PM

Article image
Boost for BT as Altice telecom group buys 12% stake
Firm owned by French-Israeli billionaire Drahi becomes biggest stakeholder in move to exploit UK broadband rollout

Mark Sweney and Kalyeena Makortoff

10, Jun, 2021 @8:33 AM

Article image
Vodafone to make £84bn Verizon sale
Largest corporate transaction in a decade and third largest ever set to produce a record windfall for British shareholders

Juliette Garside, telecoms correspondent

01, Sep, 2013 @6:22 PM

Article image
Despite its optimism Marston’s pint glass is less than half full | Nils Pratley
Hope springs eternal in the boardroom, but the stock market is not as upbeat about the hospitality sector

Nils Pratley

06, Dec, 2022 @6:46 PM

Article image
Vodafone agrees £1bn deal for Cable & Wireless Worldwide
But CWW's biggest shareholder Orbis raises concerns just hours after two companies' boards announce deal

Julia Kollewe and Juliette Garside

23, Apr, 2012 @6:32 PM