By Louise Rasmussen
COPENHAGEN (Reuters) -French investor Xavier Niel and his Iliad telecoms group have agreed to buy a 19.8% stake in Swedish telecoms operator Tele2 (ST:TEL2b) for 13 billion crowns ($1.26 billion), investment company Kinnevik said in a statement on Monday.
Niel and his companies will buy the stake from Kinnevik, the largest shareholder in Tele2, through Freya Investissement.
The transaction will take place in three steps with a first close of 2.9 billion crowns while the rest is conditional on regulatory approvals, Kinnevik said.
Iliad will hold less than 30% of the voting interest in Tele2 following completion of the transaction, Kinnevik said.
The total proceeds of 13 billion crowns correspond to an average blended purchase price of 94.2 crowns per Tele2 Class A and Class B share, implying a 13% premium to the closing price of the Tele2 Class B share on Feb 23.
Unlisted Iliad, founded and majority owned by French billionaire Xavier Niel, is seeking to push consolidation of Europe's telecoms sector.
In 2022, Niel took control of a 2.5% stake in Vodafone (LON:VOD). The company offered over 11 billion euros to buy Vodafone Italy outright the same year but was rebuffed, which lead to a sweetened offer last month, which was also rejected by Vodafone.
Kinnevik's sale will prompt the company to review its capital structure together with major shareholders, CEO Georgi Ganev said.
"After completion of this transaction, Kinnevik will hold a very strong net cash position," Ganev said in a statement.
"We will deploy the capital with patience and focus to bring further clarity to our equity story and value creation to our shareholders."
Kinnevik in May 2022 sold roughly a quarter of its holding in Tele2 for 6.1 billion crowns, and the prospect of a further sale had weighed on the Swedish telecom company's stock.
($1 = 10.3210 Swedish crowns)