KKR Challenging Cellnex for Vantage Towers Stake


UPDATE KKR & Co. is the apparent frontrunner as it competes with Madrid-based tower company Cellnex Telecom SA for a stake in Vodafone Group Plc’s Vantage Towers unit, according to Private Equity Insights. The private equity firm, which has teamed up with Global Infrastructure Partners, has the inside track as Vodafone evaluates the binding offers it received last week for a stake in Frankfurt-listed Vantage Towers AG (VTWR.F), according to people familiar with the situation.

For its part, Cellnex, bidding together with Singapore sovereign wealth fund GIC Pte, is seeking to buy a majority stake that would give it operational control. Cellnex is Europe’s largest independent tower company, according to market analysts, with over 102,000 active towers in 12 countries, as of mid-2022. 

At the stock market close on Friday, Vantage Towers had a market capitalization of $14.2 billion. A lineup of private equity and strategic bidders, including EQT AB of Sweden and American Tower (NYSE: AMT), have previously shown interest in a deal for Vantage, Bloomberg News reported.

While the KKR-led group would like to seal a deal as early as this week, the situation remains fluid. Certainly, KKR and its partners want to avoid a repeat of their last-minute loss in July in the bidding for a majority stake in Deutsche Telekom AG’s GD Towers unit, which eventually went to Brookfield Asset Management and DigitalBridge Group (NYSE: DBRG), Inside Towers reported.

There is some speculation that Vodafone, which owns 82 percent of Vantage Towers, might accept a final offer before the company reports its half-year fiscal 2022 results scheduled on November 15. Vodafone continues to weigh the bids but has not yet named a winner.

High Interest in Infrastructure Assets

Europe’s telecom companies have been selling off infrastructure assets to raise money for investments in extensive fiber builds and wireless network upgrades, and to reduce their sizeable debt loads.

In October, Bloomberg wrote that Telefonica SA and Liberty Global Plc were considering selling part or all of their 50 percent stake in the U.K. tower company, Cornerstone, to help raise funds for fiber broadband investments. In a similar vein, Bloomberg reported last week that EQT is emerging as the frontrunner to acquire a stake in French telecom tower owner TDF.

Digital infrastructure assets including towers, fiber, data centers and small cells are attractive investments due to their steady and predictable returns. Strong demand for infrastructure assets has helped dealmakers buck the overall slowdown trend in global M&A deal flow this year.

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