TELUS Corp. (NYSE: TU), headquartered in Vancouver, British Columbia, has shortlisted three major Canadian asset managers, including two pension funds, to buy a 49 percent stake in its portfolio of 3,000 towers used in its mobile network, a deal valued at nearly $900 million, reports The Globe and Mail. Ontario Municipal Employees Retirement System (OMERS) and Brookfield Asset Management (NYSE: BAM), the infrastructure division of Toronto-based Brookfield, are listed among the final bidders, along with British Columbia Investment Management Corp. (BCI), according to a report by The Globe and Mail, which did not disclose its sources.
These asset managers are bidding for a minority stake in TELUS’s towers, which will become a new company called Terrion. TELUS is selling the stake to reduce debt, with TD Securities managing the process, dubbed Project Air. TELUS aims to announce a deal by the end of October, and close by year-end. If successful, former TELUS executive Eros Spadotto will lead Terrion as CEO.
In a statement, TELUS spokesperson Richard Gilhooley declined to respond to specific questions about the negotiations. He said the initiative reflects the company’s commitment to long-term growth as it looks to strengthen its balance sheet, and that 100 percent of any proceeds would be used to pay down debt.
Unlike many developed markets, Canadian mobile network operators have retained their infrastructure assets, such as towers, citing operational efficiency, according to Inside Towers Intelligence. However, rising debt from network expansion has led to reconsideration. In 2024, TELUS’s towers generated an estimated $116 million in leasing revenue and $80 million in cash flow, supported by long-term contracts and key sites in six of Canada’s seven largest cities.
All three fund managers have significant telecom infrastructure holdings.
BCI has invested in telecom towers in India, in one instance in partnership with Brookfield’s infrastructure arm. In June, the B.C.-based pension fund manager bought a minority stake in an Asia-based telecom infrastructure company, Pinnacle Towers, from KKR & Co. (NYSE: KKR), Inside Towers reported.
Brookfield owns cell tower networks in France, Germany and Austria, along with India.
OMERS’ infrastructure arm owns one of the largest telecom tower networks in Australia along with fiber networks in Germany and France, and invests in Canadian fiber network provider, Beanfield Technologies.
The U.S.-based public tower companies also took a look. Early in the sales process, SBA Communications (NASDAQ: SBAC) held talks with TELUS and its bankers, The Globe and Mail reported. SBA owns and operates roughly 400 towers in Canada, according to Inside Towers Intelligence, but decided not to make a bid because its executives wanted control of the TELUS division, which the Canadian company refused to cede, reported The Globe and Mail. American Tower (NYSE: AMT) and Crown Castle (NYSE: CCI) also decided not to bid for the TELUS towers because they too would not be able to dictate how those towers would be managed.
By John Celentano, Inside Towers Business Editor
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