Divesting itself of towers could raise up to £750 million to invest in mobile and fibre infra
The Financial Times reports that Virgin Media O2 is looking to sell of its towers to raise funds to expand its fibre broadband and mobile infrastructure. The operator is jointly owned by Telefonica and Liberty Global, and in turn owns half of Cornerstone.
The other half was originally owned by Vodafone, and now belongs to Vantage Towers, in which Vodafone has a controlling interest.
Cornerstone was set up in 2012 and designed to more efficiently own and manage the tower infrastructure of both Vodafone and O2. The two operators remain the anchor tenants.
It is thought Cornerstone is now worth about £3 billion: adjusted earnings before interest, tax, depreciation and amortisation after leases were £111 million in 2020.
Wheels in motion
Virgin Media O2 reportedly has put wheels in motion to sell half of its stake, so 25% of Cornerstone. Unnamed sources say anyone party wishing to acquire the whole of that 25% will be expected to pay a premium.
Cornerstone is the UK’s largest towerco with about 14,200 masts and about 1,400 other sites, with commitments to build further 1,200 new sites by 2025.
Goldman Sachs and JP Morgan are to handle the sale.
Virgin Media O2 is the UK’s second largest network operator after BT and has pledged to spend some £2 billion on upgrading to fibre its network that covers 15.5 million premises by 2028. It was a £4.5 billion joint venture with its parent companies plus infrastructure investor InfraVia Capital to pass a further 7 million premises.