Vodafone turned down an €11.25bn offer yesterday (10 February) from French telecom giant Iliad and UK private equity firm Apax to buy a 100pc stake in its Italian business, in a move that has been described as the “opening whistle” on a new season of asset consolidation in Europe.

According to Reuters, Vodafone CEO Nick Read has vocal in his wish to see European mobile operators merge in local markets to build bigger companies with greater capacity to invest in new telecom trends such as fibre and 5G.

Vodafone argued that the offer, which was first made by Iliad last week, was not in the best interest of its shareholders. If accepted, the offer would’ve seen the UK-based telecom giant lose its entire business in Italy, where its competition is cutthroat with Wind Tre and Telecom Italia.

“Vodafone continues to pragmatically pursue several value accretive in-market consolidation opportunities to deliver sustainable market structures in its major European markets, including Italy,” the company said in a statement.

Emma Mohr-McClune, service director of technology at GlobalData, views this bid as “the opening whistle on what is clearly to become a lively and potentially unconventional bidding season for Vodafone’s European assets in the UK, Italy, Portugal and Spain”.

She said that Iliad’s offer to buy 100pc of Vodafone Italy was bound to “not be viewed favourably” from the very start and that it is not in Vodafone’s interest to sell its Italian business. Instead, she said, the telecom will be likely looking at joint ventures or mergers.

“What’s more, in looking for the right merger or joint venture partner, Vodafone will clearly favour entities that will be able to help it consolidate its strength in convergence and digital services in the B2B channel, and particularly the difficult-to-target SME sector,” said Mohr-McClune, adding that Iliad Italy’s qualifications are poor “on all counts”.

Yesterday, Vodafone was the victim of a “deliberate and malicious” cyberattack in Portugal, which caused disruption to some emergency services reliant on the network.

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