Shares of Vodafone Group have dropped, leading the FTSE 100 index fallers, after the company rejected a revised proposal to merge its Italian businesses with Iliad Group's.

At 0945 GMT, Vodafone shares were down 3.59% at 66.21 pence, a decrease of 2.46 pence. Over the past 12 months, shares have declined by 29%.

The European telecom company announced on Wednesday that the new proposal included a cash payment of 6.6 billion euros ($7.16 billion) and a shareholder loan of EUR2.0 billion for Vodafone, while Iliad would receive EUR400 million in cash and EUR2.0 billion in shareholder loans.

Vodafone did not accept this offer from Iliad, but stated that it is no longer in talks with them. However, discussions with other parties in Italy are still ongoing. "We said in December that we are exploring options with several parties in Italy. We are no longer in talks with Iliad, but our discussions with others continue," said Vodafone.

Iliad Group has announced that Iliad Italia will now pursue its stand-alone strategy, building on its track record.

In December, Iliad Group had proposed the creation of a new company in collaboration with Vodafone, combining their Italian businesses. This proposal had received support from the board and main shareholder, Xavier Niel.

Under the previous proposal, Vodafone would have received EUR6.5 billion in cash and a shareholder loan of EUR2.0 billion, while Iliad would have received EUR500 million in cash and a shareholder loan of EUR2.0 billion.

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