Home stock market IPO's Vodafone said to eye raising $5 billion in towers IPO

Vodafone said to eye raising $5 billion in towers IPO

By Aaron Kirchfeld, Thomas Seal and Ruth David

Vodafone Group Plc is considering raising about 4 billion euros ($4.7 billion) from an initial public offering of its European towers unit early next year, according to people familiar with the matter.

UK-based Vodafone is planning to list its Vantage Towers unit in Frankfurt as soon as the first quarter in a deal that could value the business at around 20 billion euros, including debt, the people said, asking not to be identified as the details aren’t public. This could make it the largest IPO on a European exchange for more than three years, data compiled by Bloomberg show.

Discussions are ongoing and the final size and timing depend on market conditions and whether Vodafone includes its stake in Cornerstone Telecommunications Infrastructure Ltd., a UK mast joint venture with Telefonica SA, as part of the listing, the people said.

Early meetings with institutional investors, which are attracted to the steady, long-term returns of wireless infrastructure assets, have indicated strong demand for shares in Vantage, according to the people.

A representative for Vodafone declined to comment. The company has said it plans to use proceeds from any sale to reduce group debt.

Vantage has more than 68,000 sites in nine markets, according to its website. Vodafone’s decision to list the business in Germany reflects the high share of tower assets from that country in its portfolio, Chief Executive Officer Nick Read said in July.

While Read has so far declined to put a value on Vantage, he has pointed to the trading multiples of 27 to 28 times earnings before interest, tax, depreciation and amortization at Spanish tower rival Cellnex Telecom SA.

Vantage could soon find itself overtaken as the biggest tower company in Europe by Cellnex, which has agreed to buy CK Hutchison Holdings Ltd.’s European towers for around 10 billion euros. The deal will add around 24,600 new towers to Cellnex’s existing 60,000 sites.

Cellnex shares are up around 50% this year, valuing the acquisitive Spanish company at 26 billion euros, as investors clamor for infrastructure assets.

A slew of European companies are lining up large listings for next year, from EQT AB’s pest control firm Anticimex to SoftBank Group Corp.-backed online used car retailer Auto1 Group GmbH. Companies have raised $23 billion from IPOs on European exchanges this year, Bloomberg data show. That’s a fifth of the total on Asian bourses and less than a fifth of the US figure.

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