KKR & Co. and Global Infrastructure Partners are among private equity firms along with Swedish investment firm EQT AB, all interested in competing for a stake in Vodafone Group’s Vantage Towers wireless towers unit, Bloomberg reported.
Vodafone has invited suitors to participate in an auction process, say people close to the situation. At the close of business yesterday, the Frankfurt-listed Vantage Towers had a market value of $14 billion. Vodafone has not made a final decision on the size of the stake it wants to sell. Given the short list of global private equity investors, however, the bidders are likely to seek a majority holding. The U.K. carrier currently holds around 82 percent of Vantage, according to data compiled by Bloomberg.
There is no certainty the private equity firms will proceed with formal offers, and other bidders could still emerge. None of the parties are commenting though, citing confidentiality.
Europe’s mobile network operators are gradually selling off their infrastructure assets to raise needed money for investments in costly fiber-optic rollouts and wireless network upgrades, as well as to reduce their large debt obligations. In July, Deutsche Telekom AG agreed to sell a majority stake in its towers unit to Brookfield Asset Management Inc. and DigitalBridge Group (NYSE: DBRG) in a deal valuing the business at $17.5 billion, as Inside Towers reported.
These assets, which carriers once saw as integral to their operating business models, now are attractive to investment firms because of their steady, predictable returns. Such infrastructure assets do not come cheap, however.
Accordingly, investment funds have been raising money to bid for these assets. KKR raised $17 billion for its latest global infrastructure fund earlier this year, and Bloomberg News reported in February that GIP was targeting $25 billion for the world’s biggest pool of capital dedicated to infrastructure investments.
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