KKR, GIP And Other PE Firms Pursue Stake In Vodafone’s $13-Billion Towers Arm: Report

Vodafone hasn’t take a final call on the size of the stake it wants to sell yet, though a number of bidders are keen to get a majority holding, according to report

Currently, Vodafone Plc holds around 82 per cent of Vantage, one of Europe's leading tower companies.

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Private equity (PE) firms such as KKR & Co. and Global Infrastructure Partners are among few companies competing for a stake in Vodafone Group Plc’s wireless towers unit, quoting sources, news agency Bloomberg said on Friday.

According to the report, Swedish investment firm EQT AB has also been exploring a potential investment in Frankfurt-listed Vantage Towers AG, one of Europe's leading tower companies, the sources privy to the development pointed out, while adding that the telco major has invited suitors to participate in an auction process.

Shares in Vantage rose as much as 4.2 per cent on Thursday, giving the company a market value of 13.4 billion euros ($13.4 billion).

The report stated that Vodafone hasn’t take a final call on the size of the stake it wants to sell yet, though a number of bidders are keen to get a majority holding, the sources said. Currently, the UK carrier holds around 82 per cent of Vantage, according to Bloomberg data.

Sources, however, mentioned that there’s no certainty the PE firms will proceed with formal offers, and other bidders could still emerge. Representatives for EQT, KKR, Vantage, and Vodafone declined to Bloomberg’s request for comment, while a spokesperson for GIP didn’t immediately provide comment.

Phone carriers in Europe have started to offload infrastructure assets to raise money for investments in costly fiber-optic rollouts and wireless network upgrades, as well as to cut their large debt piles.

In July, Deutsche Telekom AG agreed to sell a majority stake in its towers unit to Brookfield Asset Management Inc. and DigitalBridge Group Inc. in a deal valuing the business at 17.5 billion euros. These assets, which the telecom firms once saw as vital to their business models, are attractive to investment companies thanks to their steady, predictable returns.

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.