Iliad to buy Poland’s Play in $2.6bn deal

Bloomberg

Iliad SA has agreed to buy Polish telecommunications company Play Communications SA for $2.6 billion as it expands across Europe.
French billionaire Xavier Niel’s Iliad has offered 39 zloty per share for Play, and has received binding commitments from two controlling shareholders for their 40% stake, the companies said in a statement on Monday.
The cash-and-debt deal shows Niel’s ambition to accelerate expansion plans following acquisitions in Ireland and Italy. Play Communications, which is the youngest of Poland’s four biggest mobile telecommunications providers, started operating in 2007. It’s controlled by Greece’s Olympia Development SA and Iceland’s Novator Partners LLP.
Play’s shares surged 37% to 38.52 zloty in Warsaw at 9:47 am on Monday after earlier gaining as much as 38%, the biggest intraday gain since the company’s 2017 initial public offering. Play’s rivals Orange Polska SA and Cyfrowy Polsat SA also gained as much as 14% and 7% respectively. Iliad falls 2.1% in Paris.
Play competes with Orange SA’s and Deutsche Telecom AG’s Polish units as well as Cyfrowy Polsat’s operator, Plus, owned by the country’s richest person, Zygmunt Solorz. Earlier this year, the Polish company agreed to buy Virgin Mobile’s local operations in a 13.4 million-euro deal.
As the telecommunications market is driven by convergence, with operators offering combinations of fixed and mobile services, Iliad could be interested in further deals in Poland, particularly fixed-line assets, said Konrad Ksiezopolski, an analyst at Haitong Bank SA, in a note.
Play doesn’t currently offer fixed-line services, like broadband Internet access, except through partnerships with other carriers. Iliad said Monday that it will be the “best industrial partner to accompany Play’s growth in the mobile market and optimize its entry into the fixed market.”
Iliad Chief Executive Officer Thomas Reynaud declined to comment about future investments in fixed line or fiber for Play.