Billionaire Xavier Niel Proposes $4.1 Billion Deal to Acquire Millicom

Billionaire Xavier Niel Proposes $4.1 Billion Buyout of Millicom International Cellular SA

Billionaire Xavier Niel has proposed a buyout offer for Millicom International Cellular SA, valuing the Latin American telecommunications giant at approximately $4.1 billion. The bid was made through Niel’s investment vehicle, Atlas Luxco Sarl, which offered $24 per share in cash. This offer comes slightly below Millicom’s closing share price of $24.55 last Friday.

Despite the financial appeal of the proposal, Millicom’s shares remained stable at market open on Monday. The company’s board has yet to release a formal recommendation regarding the offer. However, an independent board committee has already rejected the proposal, deeming it insufficient given the company's financial performance in the second quarter.

The offer from Niel is fully funded, with financial backing from Atlas and several banks. This acquisition attempt marks at least the second instance in recent years that Millicom has become the target of a takeover. Last year, the company engaged in discussions regarding a possible sale to Apollo Global Management Inc. and Claure Group, during which Niel acquired a stake in Millicom.

Strategic Intent

According to a statement from Atlas, the goal behind the buyout is to expand Millicom’s network reach and distribution capabilities, thereby increasing its customer base and making the most of its telecom expertise. Millicom, operating under the Tigo brand, serves more than 50 million subscribers across Latin America, specifically in countries such as Bolivia, Colombia, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, Panama, and Paraguay. Its reported sales last year totaled $5.6 billion.

Analysts' Perspectives

BI analyst Matthew Bloxham commented on Niel’s offer, indicating that Niel perceives Millicom’s potential for cash generation as undervalued. Bloxham drew a parallel between Niel’s investment and that of Patrick Drahi’s significant stake in BT, suggesting that these wealthy investors leverage their sector expertise to secure attractive returns. He further pointed out that the varied performance of Millicom’s operations in Latin America—due to competitive pressures, economic volatility, and fluctuating demand—has contributed to the company’s subdued valuation multiples.

Advising Niel on the deal are financial heavyweights including BNP Paribas SA, Credit Agricole SA, JPMorgan Chase & Co., Lazard Inc., Societe Generale SA, and Svenska Handelsbanken AB. Additionally, the financing for the bid is being provided by BNP, Credit Agricole, JPMorgan, Natixis, and Societe Generale.

As the proposed takeover progresses, eyes are now on Millicom’s board to see how they will respond to Atlas Luxco Sarl’s fully financed, albeit controversial, buyout offer.