An independent committee representing Millicom’s board recommended shareholders turn down a buyout offer from Xavier Niel’s Atlas Investissement which valued the Latin America-focussed operator group at more than $4 billion.

The advice to reject the approach came as little surprise given the group made a pre-emptive statement ahead of the offer being tabled outlining a bid at that level would be insufficient.

In regulatory statements filed yesterday (15 July), the company indicated following discussions with financial advisers, the board’s committee had determined the offer of $24 per share significantly undervalues Millicom.

It explained the price did “not adequately take into account expectations based on Millicom’s long-range plan” and financial expectations moving forward. It added the bid was at a level “well below trading multiples for comparable listed companies”.

The group also noted the offer was below the share price at the time of release as well as the closing market price on what it defines as “certain other key dates”.

Atlas launched an offer for Millicom shares it does not already own at the start of the month through subsidiary Atlas Luxco, with the proposal available until 16 August.

Prior to tabling the proposal, it already held a 29 per cent stake.

On making its bid, Atlas described the price set as providing “compelling value” and “high transaction certainty” to Millicom shareholders.