- Investment firm Atlas Luxco has offered $24 per share to other Millicom shareholders
- Xavier Niel already owns a 29% stake in Millicom via his Atlas vehicle
- Millicom has said the offer undervalues the company
Xavier Niel on Monday confirmed his intention to buy out other shareholders of Millicom International Cellular in a deal worth about $4.1 billion, marking the French entrepreneur’s latest effort to expand his telecom empire.
In a statement, Atlas Luxco, a subsidiary of Atlas Investissement that in turn is fully owned by Niel’s investment vehicle NJJ Holding, said it is offering $24 per share in the operator, which serves primarily mobile customers under the Tigo brand in Latin America. The offer is due to expire on August 16.
The move had been anticipated, with Millicom itself noting in May that it had received a “non-binding expression of interest” from Atlas Luxco, which already owns slightly more than 29% of Millicom. Shares in Luxembourg-based Millicom are listed on Nasdaq Stockholm, in the form of Swedish depository receipts, and on the U.S. Nasdaq.
Last week, independent members of Millicom’s board noted that an offer of $24 per share would “significantly undervalue Millicom and not be in the best interests of Millicom’s shareholders.”
However, Atlas said it “firmly believes” that the offer brings “compelling value” and represents the “highest share price for the shares reached by Millicom over the last two years until early May 2024.”
Notably, this is also the second time in two years that Millicom has been an active takeover target. It was in talks last year on a possible sale to Apollo Global Management and Claure Group, but the talks broke down in June 2023 without a deal being reached. Niel first acquired a 7% stake in Millicom in November 2022.
Global expansion
Millicom provides its services in Bolivia, Colombia, Costa Rica, El Salvador, Guatemala, Honduras (via a joint venture), Nicaragua, Panama and Paraguay. In 2023, it reported annual sales of $5.66 billion, of which close to $3 billion came from mobile services. It said it provided mobile and fixed broadband services to more than 45 million customers as of March 31, 2024.
Millicom was also previously active in six countries in Africa, but has gradually offloaded its operations and exited the region in order to focus on Latin America.
Atlas said it has identified Millicom as an attractive investment opportunity due to its position as a “regional market leader in Latin America and its strong position in South America, its high-quality assets and strong brand.”
“Millicom has also demonstrated a long-term commitment to the region with its significant investments, which are expected to support digital development for the relevant populations and economies as well as the achievement of its ambitious ESG targets,” the investment firm observed.
Atlas further emphasized that its intention is to support Millicom “in the execution of its strategic plan” and “continue expanding the reach and capacity of Millicom’s networks and distribution capabilities to grow its customer base.”
Atlas also believes that Millicom will benefit from the expertise of the purchaser group, including that of NJJ and Niel.
Indeed, Xavier Niel owns the Iliad Group with operations in France, Italy, Poland, Sweden and the Baltics, while NJJ has invested in telecom assets in Switzerland, Ireland, Monaco, Cyprus, Malta, Sweden and the Baltics.
Recently, Niel outlined plans to buy two companies in Ukraine in order to create a “national telecom champion.” The objective here is to create a new operator with a triple-play offering of mobile, fixed and TV services.