KKR, Global Infrastructure Partners Join Forces with Vodafone for Vantage Towers Stake -- Update
09 November 2022 - 12:35PM
Dow Jones News
By Ian Walker and Mauro Orru
KKR & Co. and Global Infrastructure Partners LLC have agreed
to form a joint venture with Vodafone Group PLC to steer Germany's
mobile-towers company Vantage Towers AG, leveraging Vodafone's
controlling stake in the firm and its extensive portfolio of
mobile-phone towers.
The U.K.-based telecommunications giant said Wednesday that the
joint venture will own its 81.7% stake in Vantage Towers. KKR and
Global Infrastructure Partners will build a stake of up to 50% in
the joint venture by acquiring shares from Vodafone in cash.
The partners will make a takeover proposal for the outstanding
shareholders of Vantage Towers at EUR32.00 per share, giving
Vantage Towers an equity value of 16.2 billion euros ($16.32
billion). Vodafone expects to make between EUR3.2 billion and
EUR7.1 billion depending on the take-up of the takeover proposal,
it said.
"We believe Vantage Towers' high-quality footprint and network
across the region ideally position it to meet the ever-growing
demand for mobile connectivity in Europe," said Vincent Policard,
partner and co-head of European Infrastructure at KKR.
"We have a shared goal of creating a pan-European telecoms
champion by continuing to grow and develop the business, leveraging
the consortium's significant telecoms infrastructure investment
experience and global resources," he said.
Founded in 2020, Vantage Towers listed in Frankfurt in March
2021. The company has a network of about 83,000 tower sites across
ten countries. Vantage Towers said it welcomed the partnership with
Vodafone and the infrastructure investors and recommended that
shareholders accept the takeover offer.
The telecommunications sector has seen a flurry of deal making
in recent years. Brookfield Infrastructure Partners LP and
DigitalBridge Group Inc. agreed in July to buy a stake in Deutsche
Telekom AG's tower business for roughly EUR6.6 billion.
The Vantage Towers deal, which is conditional on regulatory
clearances and is expected to close in the first half of 2023, has
the support of RRJ Capital, Vantage Towers' second largest minority
shareholder, owning 2.4% of shares.
"This transaction successfully delivers on Vodafone's stated
aims of retaining co-control over a strategically important asset,
deconsolidating Vantage Towers from our balance sheet to ensure we
can optimize its capital structure and generate substantial upfront
cash proceeds for the group to support our priority of
deleveraging," Vodafone Chief Executive Nick Read said.
Vodafone said it expects the deal to have a slightly dilutive
effect on its adjusted earnings per share and free cash flow. It
will use the money from the sale of its interest to reduce
debt.
Vodafone shares at 1054 GMT were down 1.5% at 104.69 pence;
Vantage Towers shares were up 11% at EUR32.50.
Write to Ian Walker at ian.walker@wsj.com and Mauro Orru at
mauro.orru@wsj.com; @MauroOrru94
(END) Dow Jones Newswires
November 09, 2022 06:20 ET (11:20 GMT)
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