Vodafone sells masts unit stake to Saudi-backed PE consortium

Vodafone has agreed to promote as much as 50 per cent of its €14.8bn cell phone masts enterprise to a consortium together with the non-public fairness corporations KKR and International Infrastructure Companions and Saudi Arabia’s Public Funding Fund.

The telecoms firm will switch its 82 per cent stake in Vantage Towers, which operates tens of hundreds of cellular towers throughout 10 European nations together with the UK, to a brand new entity that it’s going to collectively management with the group of personal buyers.

The brand new entity, Oak BidCo, will then launch a voluntary public takeover provide for the 18 per cent of Vantage shares it doesn’t already management. It can provide €32 per share, about €3 greater than Tuesday’s closing worth earlier than the deal was introduced.

The FT reported on Tuesday that the PIF was bankrolling the deal.

The deal will give the non-public fairness teams and the Saudi wealth fund publicity to considered one of Europe’s largest masts companies, a crucial piece of communications infrastructure, whereas releasing up money for Vodafone which has been underneath stress to revive sluggish efficiency.

The transaction is ready to “generate substantial upfront money proceeds for [Vodafone] to assist our precedence of deleveraging”, the telecoms firm’s chief govt Nick Learn mentioned.

It “delivers on Vodafone’s said goals of retaining co-control over a strategically vital asset [and] deconsolidating Vantage Towers from our stability sheet”, he added.

Non-public fairness teams have been ploughing cash into infrastructure offers in recent times, and have been extra simply in a position to entry debt for such transactions than for different leveraged buyouts as financing markets freeze up.

The deal additionally underscores how buyout teams are more and more turning to Gulf buyers which have benefited from excessive vitality costs and might stump up giant sums as co-investors in offers.

Vodafone has been underneath stress to overtake its operations. The French telecoms billionaire Xavier Niel this 12 months constructed a 2.5 per cent stake as he sought a shake-up, saying in September that there have been “alternatives to speed up . . . the streamlining of Vodafone’s footprint and the separation of its infrastructure belongings”.

Europe’s largest activist investor Cevian constructed a stake in Vodafone final 12 months and had been pushing for the FTSE 100 firm to promote poorly performing divisions and simplify its worldwide portfolio, though it had bought nearly all of its stake by June, in response to folks with data of the matter.

“At KKR we’re long-term conviction buyers in Europe’s digital infrastructure,” the non-public fairness agency’s co-head of European infrastructure Vincent Policard mentioned. “At Vantage Towers we intend to . . . capitalise on the expansion on this sector and to assist drive consolidation in a fragmented market.”

The brand new homeowners would think about delisting Vantage Towers from the Frankfurt Inventory Trade after the deal closes, they added within the assertion.