Canadian consortium gets 51% in surprise 11th hour bid
Deutsche Telekom (DT) has told its sources at Reuters that it will sell 51% of its tower business to a consortium of Canada’s Brookfield and private equity group DigitalBridge Group after they tabled a surprise eleventh hour bid. The stake in the tower unit, known as Deutsche Funkturm (DFMG), cost the consortium €17.5 billion euros ($17.53 billion), DT said in a statement.
The transaction, which is expected to close towards the end of this year, would reduce the debts of the flagship German telco by €10.7 billion, the company added.
Yesterday it was reported that Spain’s Cellnex had withdrawn its offer for a stake in DFMG, leaving the field clear for KKR to secure the estimated €18 billion ($18.02 billion) deal. However it appears that the Canadian private equity firm has pipped its American rival at the post in a deal that is structured very differently and leaves DT with more control over the assets but less money to clear its debts.
DT has been working with Goldman Sachs, which was appointed as adviser in the sale of its 40,600 masts. The DT tower sale process had begun March with strategic private equity bidders vying with infrastructure funds for a stake in the mast unit. Vodafone’s towers business Vantage Towers, as well as American Tower had reportedly considered bids earlier in the auction process.