UPDATE On Tuesday, Vodafone reported the IPO for Vantage Towers raised over $2.4 billion and is Vodafone’s first step in monetizing its assets, according to Consultancy.eu. With over 80,000 towers in its network, the Germany-based infrastructure company is listed on the Frankfurt Stock Exchange.
Various firms were involved in the transaction, including Joint Coordinators BoFA Securities (previously Bank of America Merrill Lynch), Morgan Stanley, and UBS. Barclays, Berenberg, BNP Paribas, Deutsche Bank, Goldman Sachs, and Jefferies were involved in underwriting the transaction. Analysys Mason brought its strategic and industry expertise to the IPO, reported Consultancy.eu.
“Eighteen months ago, we started the carve-out of Vantage Towers as part of our strategy to improve returns on our assets,” said Vodafone CEO Nick Read. “We have moved at pace, and today’s successful IPO is the culmination of all that hard work.”
Demand for Vantage Tower stock exceeded the initial 95.8 million share issue, pushing Vodafone to consider a greenshoe option.* The initial share price of $28 experienced nearly a 5 percent jump on the first day of trading, valuing Vantage Towers at over $14.4 billion. Should Vodafone move forward with the greenshoe option, it could retain roughly 81 percent of the company while earning up to $2.7 billion on the deal, reported Consultancy.eu.
According to Read, the total raised will be used to pay off the company’s debt – estimated at $82.9 billion by Reuters. Vantage Towers chief executive Vivek Badrinath noted that the additional cash flow gives the company more options. “There is a lot of interest from cell phone operators and other companies, e.g., from the Internet of Things sector, to talk to us in the next few months,” Badrinath said.
*A greenshoe option is an over-allotment option. In the context of an initial public offering (IPO), it is a provision in an underwriting agreement that grants the underwriter the right to sell investors more shares than initially planned by the issuer if the demand for a security issue proves higher than expected. Investopedia
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