Investment vehicle of tech disruptor Xavier Niel points to chance to prompt ‘streamlining’ of UK telecoms group
The French telecoms billionaire Xavier Niel has bought a 2.5% stake in Vodafone, pointing to opportunities to speed up a “streamlining” of the London-listed group’s business.
Xavier Niel, who founded the telecoms company Iliad, has acquired 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”, wiping out the country’s established tech and telecoms incumbents while making an $8bn (£7bn) personal fortune.
Not that he requires the money: his partner of over ten years is Delphine Arnault, daughter of France’s wealthiest man, Bernard Arnault, and heiress to the huge luxury conglomerate LVMH that build her father a $154bn fortune.
In February, Nick Read, Vodafone’s chief executive, confirmed it was holding talks with competitors in its largest markets. Read has stated that the European telecoms industry has to consolidate to set up more lucrative businesses that are more alluring to investors.
That month, Vodafone scrapped an €11.25bn (£9.8bn) offer from Iliad, also owned by Niel, which operates in Italy, France, and Poland, for its Italian business.
Niel’s other business interests include French newspaper Le Monde, which he saved from insolvency, together with two other prominent investors, in 2010. Two years ago he grew his media portfolio, taking over a daily newspaper in the French West Indies, French horse racing paper Paris-Turf, and the Nice-Matin newspaper group.
He also owns a five-star hotel in the ski resort of Courchevel, and has built a thriving tech school that has no teachers, no fees, and no books for 1,000 students. But his business empire is embedded in telecoms. A few years after getting a Sinclair ZX81 as a Christmas gift, Niel left school at 19 to start his first business, Minitel, a forerunner of the internet that provided sex-oriented chat services.
While Niel went ahead to quit most of his pornography interests, he retained two sex shops which eventually would cause a brush with the law and a two-year suspended prison sentence for embezzlement of company assets.
In the mid-1990s he invested in the first internet provider in France, cashing in just before the internet bubble burst in the early ’00s, and proceeded to start his own company, Iliad.
Iliad is popular for its revolutionary service called Free, which restructured the French market with free internet access, thereafter built into a very successful low-cost broadband and mobile model that Niel has recreated to restructure markets he has accessed with his telecoms investments.
In 2021, Niel sought to take Iliad private owing to the “high volatility of the telecoms stock market in general and Iliad’s share price in particular”, according to group chief executive Thomas Reynaud.
Buy Crypto NowNiel joins the French-Israeli billionaire Patrick Drahi in aiming at the UK telecoms market. In 2021, Drahi raised an 18% stake in BT, making him the company’s biggest investor. Last month, the UK government established that the stake did not raise any national security concerns.
Sweden’s Cevian is another activist investor that has profited from the poor performance of Vodafone shares, which have dropped almost 50% since 2018, raising a stake in January. In May, the United Arab Emirates’ largest telecoms provider acquired a 9.8% stake in Vodafone.
