Vodafone (VOD.L) has agreed to sell a chunk of it masts company Vantage Towers to Global Infrastructure Partners (GIP) and KKR (KKR.N), creating a joint venture that will release proceeds of at least 3.2 billion euros to cut the telecoms operator's debt.
A consortium led by the two infrastructure investors and backed by Saudi Arabia's sovereign wealth fund will buy up to half of Vodafone's 81.7% stake in Vantage (VTWRn.DE), and the joint venture will offer to buy out minority shareholders at a price of 32 euros a share, Vodafone said on Wednesday. Depending on how many minority investors agree to sell their shares, and how much of Vodafone's stake GIP and KKR agree to buy, Vodafone will receive cash proceeds of between 3.2 billion euros and 7.1 billion euros, he said, which will all be used to reduce debt.
The consortium will buy a minimum 32% of the joint venture, Read said, and it intended to reach 50% by next June.
KKR, which missed out on a Deutsche Telekom (DTEGn.DE) towers deal earlier this year, revamped its alliance with GIP to pursue Vantage, and had been reported to be in pole position. Read spun off Vodafone's European towers into a separately listed company last year as a precursor to a tie-up with another industry player, a tower operator or infrastructure fund.
His preference had been to combine Vantage with an industry partner, but bringing in private equity investment was another option.
Pursuing the latter option removed tough anti-trust obstacles, analysts said.
Minority holders will be offered 32 euros for their Vantage shares, a 19% premium to the average price over the last three months and 8 euros more than it listed at in March 2021.
Shares in Vantage, which has 83,000 sites in 10 countries, were up 12% at 32.8 euros in afternoon deals.
Vodafone's investors, who since September have included French telecoms billionaire Xavier Niel, have been impatient for Read to deliver on his promise to monetise assets and drive consolidation in mobile markets.
The reduction in debt should help buy him some breathing space while he pursues deals in mobile, including a merger with Hutchison's Three in Britain.
