Private equity pact of KKR and GIP touching contract
KKR and Global Infrastructure Partners (GIP) have edged closer to a deal over Vodafone Group’s tower company, according to Bloomberg News’ sources, who claim the infrastructure market is unusually passive. The private equity pact could announce an agreement for a stake in Frankfurt-listed Vantage Towers AG today (Wednesday) says Bloomberg’s sources, who are usually quite reliable despite their apparent readiness to divulge confidential information. Saudi Arabia’s Public Investment Fund (PIF) is helping bankroll what is set to be the winning bid, according to Saudi media news source Aargam.
Vantage shares closed 2.5% higher last night (Tuesday Nov 8) giving the company a market value of €14.8 billion ($14.9 billion). Vodafone’s stock ended the day up 1.5% in London. Vodafone holds 82% of the towers group. The UK mobile network group’s Chief Executive Officer Nick Read said in February that it could sell down part of its stake while retaining “co-control.”
The chase for Vantage has been a competitive field and KKR and GIP have led a pack of other financial and strategic bidders, including a consortium of Spanish telecommunications group Cellnex Telecom SA and Singapore’s sovereign wealth fund GIC Pte. Even though talks are advanced, they could still be delayed or even fall apart, City insiders have cautioned. There has been no comment from KKR, Cellnex, Vodafone, GIP or Vantage.
Private equity deal makers have been thankful for the upsurge in network tower business as as global merger and acquisition activity has been down by 30% this year. For mobile telecom operators the extra attention has helped them to shifting their assets as they try to raise the money for fibre-optic rollouts and network upgrades. and are finding willing buyers in the form of investment firms seeking predictable returns in volatile markets.
Bloomberg News reported this week that Saudi Arabia’s Public Investment Fund is among suitors weighing a final bid for network towers being sold by Qatari telecom firm Ooredoo QPSC that could be valued at as much as $5 billion. And in Europe, private equity firm EQT AB is seen as the frontrunner to acquire a stake in French tower owner TDF. Earlier this year, KKR and GIP missed out an investment in Deutsche Telekom AG’s tower business, with a stake eventually being sold to Brookfield Asset Management and the DigitalBridge Group.