Billionaire Xavier Niel’s Atlas Investissement launched a buyout offer for the shares in Millicom it doesn’t already own at a price valuing the Latin America-focused operator group at more than $4 billion.
Its formal buyout offer was announced by the company’s subsidiary Atlas Luxco today (1 July) at $24 per share, a price described by Millicom’s board last week as significantly undervaluing the company in light of expected future financial performance.
The move came as little surprise as Atlas announced it was mulling making an offer in May and given Millicom’s pre-emptive statement on Thursday (27 June).
Equity in the operator is traded in the US and Sweden, with the offer being launched simultaneously in both countries. Atlas already holds a 29 per cent stake in the operator and pinned the cost of buying shares not owned by it or “closely related parties” at around $2.9 billion.
Valuation arguments
In its statement Atlas claimed its bid offered “compelling value” given Millicom shares’ market price before news broke of its interest.
The investment company also played down Millicom’s comments indicating a bid at that level undervalued the business.
“This last-minute communication does not contain any valuation arguments and only contains the independent bid committee’s updated forecasts as to select features of Millicom’s results of operations for 2024, which continues to be subject to review by Millicom’s management and auditor.”
Atlas noted Millicom’s top team were legally required to commit to a position or declare themselves neutral to a bid after it was made, with Swedish rules requiring this to be delivered alongside independent assessment.
The would-be new owner said it would continue to support the operator’s strategic plan and would target “expanding the reach and capacity of Millicom’s networks and distribution capabilities to grow its customer base”.
“Atlas believes that the company will benefit from the purchaser group’s long-term knowledge and experience in the telecoms sector across numerous jurisdictions, as well as the creation of potential synergies that will allow Millicom to be better equipped to focus on long-term business goals, including pursuing any potential strategic transactions and acquisitions,” it added.
Alongside Atlas, Niel’s other businesses with telecommunications interests include Iliad Group and Atlas parent NJJ Holding.
The post Iliad founder makes Millicom buyout bid appeared first on Mobile World Live.
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