Exclusive – Infra funds Vodafone for $16 billion Vantage Towers deal – sources

FILE PHOTO: Branding for Vodafone can be seen on the outside of a store in London, UK
FILE PHOTO: Branding for Vodafone is seen on the outside of a store in London, Britain September 10, 2015. REUTERS/Toby Melville

March 18, 2022

By Anshuman Daga, Pamela Barbaglia and Andres Gonzalez

SINGAPORE/LONDON (Reuters) – Global infrastructure funds have approached Vodafone to invest in its $16 billion flagship Vantage Towers, but the telecoms giant favors an industry merger, sources familiar with the matter told Reuters.

The bidders, which include investment firms Brookfield and Global Infrastructure Partners (GIP), have in recent weeks submitted unsolicited proposals to value Vantage Towers at a premium to its current valuation of 15 billion euros ($16.57 billion). , said one of the sources further on condition of anonymity.

The offers relate to a majority stake in Vantage Towers, the source said, adding that Vodafone is reviewing the proposals and has not made a decision.

Vodafone, which listed Vantage Towers in Frankfurt last year and still owns 81% of the business, is reluctant to hold talks with financial investors as it seeks an industry merger for Vantage with either Deutsche Telekom’s tower unit DFMG or complete with Orange Totem. two separate sources said no deal is imminent.

Vodafone, Orange and Brookfield all declined to comment, while GIP was not immediately available for comment.

A spokesman for Deutsche Telekom said the company is reviewing strategic options for its infrastructure business, without elaborating.

Vodafone is facing pressure from Europe’s largest activist fund, Cevian Capital, to simplify its portfolio, improve its strategy in key markets and boost returns.

If things go ahead, a deal for the tower business would align Vodafone’s strategy with Cevian’s calls to explore strategic opportunities for its tower assets.

Such a move would come after the London-listed company turned down a €11 billion approach for its Italian operations in February, while its ambitions to consolidate the Spanish market stalled in early March after Orange and MasMovil exclusives Companies in Spain had announced talks to merge their respective companies.

Telecom industry executives have repeatedly called for market consolidation to reduce competition and boost operators’ profitability at a time when they need money to invest in the rollout of 5G wireless infrastructure.


Vodafone is now focused on getting value from its majority stake in Vantage Towers, with boss Nick Read repeatedly mentioning Orange’s totem or Deutsche Telekom’s tower assets as viable candidates.

“The next phase (for Vantage) should be an industrial merger that brings our towers together with another big player, a like-minded player, a like-minded operator,” Read told reporters last month, emphasizing his interest in combining with the infrastructure assets of Orange or Deutsche Telekom.

He added that while Vodafone is willing to reduce its stake in Vantage, there is “plenty of room for us to make money while maintaining joint control of this company with this like-minded player.”

Earlier this month, Reuters reported that Deutsche Telekom has started an auction for its tower business, with preliminary bids expected in mid-March.

One of the sources said that while Vodafone is closely monitoring Deutsche Telekom’s tower sale, antitrust concerns in Germany made it more likely to seek a deal with Orange’s totem.

This source ruled out a deal with financial investors, saying the only option at this point would be an industry merger.

Burdened by heavy debt and huge costs, telecom towers have been the target of several large acquisitions in recent years.

Independent tower operators like Spain’s Cellnex and US-based American Tower Corp are also eyeing infrastructure deals as they scramble to expand in Europe for the rollout of next-gen 5G technology.

($1 = 0.9054 euros)

(Edit by Kim Coghill) Exclusive – Infra funds Vodafone for $16 billion Vantage Towers deal – sources


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