GIC, Singapore’s sovereign wealth fund, has exited its stake in Irish telecoms operator Eir with a sale to French telecoms entrepreneur Xavier Niel.
Niel’s Euronext-listed firm Iliad SA is looking to acquire a majority stake in Eir in an EUR 650 million ($772.1 million) deal that takes his firm into its second foreign market.
Prior to this deal, GIC owned 20.6 per cent of the firm. The telco’s other shareholders were US hedge fund Anchorage Capital Group (42 per cent) and investment firm Davidson Kempner (14 per cent). This deal will see Anchorage and Davidson Kempner retain stakes of 26.6 per cent and 8.9 percent, respectively.
DEALSTREETASIA reported in 2016 that GIC acquired a large minority stake in Eir. Data compiled by the Sovereign Wealth Centre indicates that GIC has assets under management estimated at $398 billion, with the Eurozone accounting for 12 per cent of its portfolio, and private equity deals such as this accounting for 9 per cent of its portfolio’s total value.
Iliad is a Paris-based telecoms operator whose operations comprise fixed and mobile telephony services, prepaid phone cards and internet access providing and hosting services. The complicated structure of the deal involves both Iliad and Niel’s private holding company NJJ Holdings LLC purchasing stake from investment funds with an interest in Eir.
The deal is set to complete in H2 2018 and is subject to EU Commission Competition clearance. Media reports citing analysts note the deal balances Niel’s expansionary ambitions against the need to keep Iliad’s debt levels low in preparation for consolidation in the French telecoms market.
The terms of the transaction value Eir at an estimated EUR 3.5 billion ($4.15 billion) including debt. Iliad will buy a 31.6 per cent stake for 320 million euros ($380.1 million), while NJJ will buy 32.9 per cent. Additionally, Iliad has an option to buy 80 per cent of NJJ’s stake in eir in 2024, giving it a further 26.3 per cent of the Irish company, according to a statement.
The deal will see NJJ assume control over Eir’s management, with Iliad’s involvement limited to its board. The deal will also see Eir’s chef executive, Richard Moat, step down from his role upon completion of the transaction.
This represents the seventh change of ownership for Eir since 1999. In the intervening years, it has been listed and delisted twice and approached bankruptcy.
Formerly known as Telecom Eireann, Eir is currently building Ireland’s largest fiber broadband network with the aim of reaching 1.9 million homes and businesses by the end of 2018. As at 30 June 2017, it posted earnings before interest, taxation, depreciation and amortization (EBITDA) of 520 million euros on revenue of 1.3 billion in the year to June 30.