Millicom rejects increased takeover offer from Xavier Niel

The independent committee of the Board of Directors of Millicom has a pretty thorough look at Atlas Luxco’s latest offer for the company of $25.75 per common share and concluded it still undervalues the company. Previously it had recommended shareholders reject an initial $4 billion offer and it’s anyone’s guess what the selling threshold might be.

Sifting through the lengthy rationale is not straightforward. On top of ephemeral factors such as Millicom’s performance since the first bid was made, it points to the fact that the bid falls short of a commonly-used measure of enterprise value. It also compares the price premium offered to equivalent M&A activity to illustrate what a lowball offer this still is. In so doing, the board could be offering hints to what an acceptable bid may be.

Since it seems the two parties are still pretty far apart, and the macro environment is far from exuberant right now, it’s hard to anticipate Neil being willing to go as high as would apparently be required. The board concludes by reiterating its position on the impact such a move would have on employees, perhaps suggesting concerns about Neil’s plans for the group if he got control over it. Still, everything has a price.