(Bloomberg) -- French billionaire Xavier Niel’s Iliad SA has revived talks on a potential deal for some of Vodafone Group Plc’s European operations, people with knowledge of the matter said. 

A transaction involving Vodafone’s Italian business is one of several possible scenarios under discussion, according to the people, who asked not to be identified because the information is private. The two companies restarted discussions after Niel acquired a 2.5% stake in the UK telecom giant in September, the people said.

The French company has also been studying Vodafone assets in other parts of Europe, the people said. Vodafone shares were up 3.3% at the close Wednesday in London, marking the biggest daily gain in more than two months and giving the company a market value of about $32 billion. The benchmark FTSE 100 Index fell 0.5%.

Iliad hasn’t yet decided which of several potential deals it will eventually pursue, and no transaction is imminent. Vodafone may wait for a permanent chief executive officer before finalizing any deals, the people said. 

Representatives for Vodafone and Iliad declined to comment. 

Vodafone rejected an €11.25 billion ($12.5 billion) bid for its Italian unit from an Iliad-backed consortium last year, saying the offer wasn’t in shareholders’ best interests. Iliad moved into the Italian mobile market in 2018 as a no-frills challenger, sparking a price war that has led to profit warnings from former monopoly Telecom Italia SpA. 

Niel later bought a stake in Vodafone itself, saying he supports the carrier’s intention to merge with rivals in markets such as the UK and Italy, as well as separate out infrastructure assets like towers and fiber optic networks. 

Vodafone, whose share price has been steadily declining for years, is under pressure to sell assets and appease shareholders. Iliad and two other strategic investors, Liberty Global Plc and Emirates Telecommunications Group Co., together control more than 20% of the company. 

While these shareholders have mostly cited financial reasons for their investments, several people familiar with the matter have said the stakes would put them in a good position to cherry-pick any plum divestments coming out of Vodafone. 

Emirates Telecom, known as e&, is Vodafone’s largest shareholder with a 14.6% stake. The Abu Dhabi-based company has been exploring a potential investment in the British carrier’s $14 billion African unit Vodacom Group Ltd. as it seeks to boost its international footprint, Bloomberg News reported last year. 

In the past, when Vodafone was searching for strategic deals to reignite growth, the company held talks about a series of potential transactions with Liberty. Vodafone bought Liberty’s German and eastern European operations for €18.4 billion. Those businesses which are now Vodafone’s biggest source of profits.

--With assistance from Thomas Seal and Benoit Berthelot.

(Updates with latest share move in third paragraph.)

©2023 Bloomberg L.P.