SINGAPORE/LONDON (Reuters) -World infrastructure funds have approached Vodafone to put money into its $16 billion mast firm Vantage Towers however the telecoms large’s desire is for an trade merger, sources accustomed to the matter informed Reuters.
The bidders, which embrace funding corporations Brookfield and World Infrastructure Companions (GIP), have submitted unsolicited proposals in latest weeks valuing Vantage Towers at a premium to its present valuation of 15 billion euros ($16.57 billion), one of many sources mentioned, talking on situation of anonymity.
The presents are for a majority stake in Vantage Towers, the supply mentioned, including that Vodafone was finding out the proposals and had not taken any choice.
Shares in Vantage Towers jumped 11.4% to a document 33.59 euros at 0926 GMT on the Reuters information and had been up 10.4% at 11 GMT.
Vodafone shares had been up 1.4%, outperforming their friends within the telecoms sector which was broadly flat.
Vodafone, which listed Vantage Towers in Frankfurt in March 2021 and nonetheless owns 81% of the enterprise, has been reluctant to interact in talks with monetary buyers because it seeks to clinch an trade merger for Vantage with both Deutsche Telekom’s towers unit DFMG or Orange’s Totem, two separate sources mentioned, cautioning no deal was imminent.
Vodafone, Orange and Brookfield declined to remark whereas GIP was not instantly out there for remark.
A spokesperson for Deutsche Telekom mentioned the corporate was reviewing strategic choices for its infrastructure enterprise, with out elaborating.
Vodafone faces stress from Europe’s largest activist fund Cevian Capital to simplify its portfolio, improve its technique in key markets and increase returns.
If it goes forward, a deal for its towers enterprise would align Vodafone’s technique with Cevian’s calls for to look into strategic alternatives for its tower property.
Such a transfer would come after the London-listed firm turned down an 11 billion euro strategy for its Italian operations in February, whereas its ambitions to consolidate the Spanish market hit a snag in early March after Orange and MasMovil introduced unique talks to mix their respective companies in Spain.
Telecoms executives have repeatedly known as for market consolidation to cut back competitors and increase operators’ profitability at a time they want money to put money into the rollout of 5G cell telecom infrastructure.
Vodafone is now specializing in extracting worth from its controlling stake in Vantage Towers, with boss Nick Learn repeatedly mentioning Orange’s Totem or Deutsche Telekom’s tower property as appropriate candidates.
“The following stage (for Vantage) ought to be an industrial merger, bringing our towers with one other massive participant, a like-minded participant, a like-minded operator,” Learn informed reporters final month, stressing his curiosity in exploring a mixture with the infrastructure property of both Orange or Deutsche Telekom.
He added that whereas Vodafone was open to slicing its stake in Vantage, there was “loads of room for us to monetize down whereas staying in co-control of that entity with that like-minded participant.”
Earlier this month, Reuters reported that Deutsche Telekom had kicked off an public sale for its towers enterprise with indicative bids anticipated in mid March.
One of many sources mentioned that whereas Vodafone is intently monitoring Deutsche Telekom’s towers sale, it’s extra prone to pursue a take care of Orange’s Totem as a consequence of antitrust considerations in Germany.
This supply dominated out a take care of monetary buyers, saying that at this stage solely an trade tie-up was on the playing cards.
Burdened by heavy debt and large prices, telecom towers have been the goal of a number of huge takeovers up to now few years.
Impartial tower operators akin to Spain’s Cellnex and U.S.-based American Tower Corp are additionally looking out for infrastructure offers as they race to increase in Europe for the roll-out of next-generation 5G expertise.
($1 = 0.9054 euros)
Reporting by Anshuman Daga, Pamela Barbaglia and Andres Gonzalez, extra reporting by Paul Sandle, Mathieu Rosemain and Nadine Schimroszik, Modifying by Kim Coghill and Jason Neely