Would give controlling interest in long term steady earner
KKR, Global Infrastructure Partners (GIP) and Stonepeak Partners have jointly made a binding offer of €21 billion for a controlling stake in the Deutsche Telekom (DT) towers unit. A Bloomberg report said the private equity/alternative investor pact is in direct competition with a consortium of Canadian investment firm Brookfield Asset Management and Spain’s Cellnex Telecom, which made a confirmatory bid for DT’s tower company.
Auction
DT created the tower auction in March, with Goldman Sachs handling the sales process for a bundle of 40,600 masts. Deliberations are still proceeding and other bidders, such as the American Tower Corp may still emerge, Bloomberg’s sources said. One insider said Vodafone Group’s infrastructure unit, Vantage Towers, is keen on DT’s towers assets and could make a bid on its own or with a partner. Investment firm DigitalBridge has also been evaluating the towerco sector and in March it announced a deal to buy Belgian mobile operator Telenet’s towers for €745 million. Bloomberg News reported in May that further acquisitions are in order.
Merger frenzy
Cellnex, Europe’s biggest mast operator, already jointly owns towers with Deutsche Telekom in Switzerland and the Netherlands. Germany is the only major European market where Cellnex hasn’t been able to build a presence. In May Nicholas Roy, CEO of Orange Group’s spin-off tower company Totem, told Mobile Europe that as the ‘uncontested fibre optic leader of Europe’ he was ready for deals. Private equity firms like buying telecoms infrastructure because it generates steady, long-term returns, whereas Europe’s mobile operators need ready cash to fund their immediate expansion. KKR raised $17 billion for its latest global infrastructure fund earlier this year, while GIP is targeting $25 billion for what would be the world’s biggest pool of capital dedicated to infrastructure investments.