Cornerstone owners plan to sell 25% of mobile mast firm- sources
10/02/2023 18:38
By Amy-Jo Crowley and Andres Gonzalez
LONDON, Feb 10 (Reuters) - Telefonica TEF.MC and
Liberty Global LBTYA.O are preparing to invite bidders for a
25% stake in Britain's largest telecoms tower company as they
seek to cash in on part of their investment, according to two
sources familiar with the matter.
While a decision on Cornerstone Telecommunications
Infrastructure Limited's (CTIL) valuation has not been made, the
business could fetch a price tag of more than 3 billion euros
($3.21 billion), based on recent deals in the sector and analyst
estimates, said the sources, who asked to remain anonymous.
CTIL is attracting interest from pension funds including
Britain's largest, the Universities Superannuation Scheme (USS),
which has started preliminary work on a potential offer, two of
the sources said.
Telefonica, Liberty Global and USS declined to comment.
A number of telecom towers deals in Europe have seen
infrastructure investors compete for a slice of the continent’s
largest towers networks partly because of their stable cash
yield and long-term contracts.
CTIL's adjusted earnings before interest, taxes,
depreciation, and amortisation (Ebitda) remained flat at 147
million euros in the six months ending September as it added
more sites and tenancies, according to its most recent results
published.
Telefonica and Liberty Global, through their joint venture
Virgin Media O2, are working with JPMorgan Chase & Co. and
Goldman Sachs Group Inc. on the sale of half their combined 50%
stake in CTIL, said the people.
Vodafone VOD.L owns 50% of CTIL through its
Frankfurt-based subsidiary Vantage Towers VTWRn.DE , and is not
planning to cut its holding, the people said.
Telefonica and Liberty Global do not plan to ask Vantage
Towers to bid for the holding for competitive reasons, according
to the sources.
A spokesperson for Vantage declined to comment.
Appetite from traditional global infrastructure funds is
expected to be limited in CTIL as many of these larger players
would have concentration issues as they already own competitors,
one of the sources said.
CTIL, established in 2012, is the largest tower company in
the UK, managing around 14,200 macro sites across the country,
according to Vantage's website.
CTIL's EbitdaAL, which deduces the cost of the leases
from EBITDA, reached 62.8 million euros in the six months to
September.
EbitdaAL is typically used as a measure of underlying
profitability for telecom towers companies. In recent deals, as
Brookfield's and DigitalBridge's acquisition of a 51% stake in
the telecom tower unit of Germany's Deutsche Telekom, buyers
have paid multiples of 27 times EbitdaAL.
USS, which has 82 billion pounds ($98.86 billion) in total
assets under management, also owns a stake in London's Heathrow
Airport and Bruc Energy, which develops renewable energy
projects in Spain and Portugal.
($1 = 0.9351 euros)
($1 = 0.8295 pounds)
(Reporting by Andres Gonzalez, Editing by Louise Heavens)
((andres.gonzalez@thomsonreuters.com; +44 (0) 7551 790019;
Reuters Messaging:
andres.gonzalez.thomsonreuters.com@reuters.net))