Frankfurt, Hamburg According to financial circles, Deutsche Telekom is in final negotiations to sell a majority stake in its radio tower business.
A consortium of investors KKR, Stonepeak and GIP is currently the last remaining bidder, as people familiar with the matter said on Monday evening. Europe’s market leader for mobile infrastructure, Cellnex from Spain, is out of the running, the company said on Wednesday. Cellnex thus confirmed a report of the Handelsblatt from Monday.
However, an official decision of Deutsche Telekom is still pending. The conditions are to be fixed by Tuesday evening. On Wednesday, it is planned that the Supervisory Board will deal with the deal.
Deutsche Telekom’s radio tower portfolio – one of the largest in Europe – has more than 33,000 locations and is valued by industry experts at around 18 billion euros. Vodafone’s subsidiary Vantage Towers had also originally shown an interest. Not least because of the difficult antitrust situation, however, she was hardly given any opportunities.
The Cellnex team had apparently offered Deutsche Telekom to take a stake in its own company, initially with ten percent, later with 20 percent. The KKR consortium, on the other hand, had granted the Group a buyback option, it said. Financially, the KKR offer is said to have been superior to that of Cellnex.
Cellnex could underpin market leadership
The companies involved did not want to comment on the information at the request of the Handelsblatt. For Cellnex, a defeat would be bitter. A takeover of the Telekom towers would secure the Group’s leading position in Europe. The resulting economies of scale would be hard to catch up with competitors.
Deutsche Telekom would also benefit from an industrial partnership. While Vantage Towers, for example, recently struggled with problems, Cellnex’s Spaniards are considered solid and reliable in the industry. Since a cooperation between Telekom and Cellnex as part of a joint venture in the Netherlands, both companies have known and appreciated each other.
The radio towers on which mobile service providers mount their antennas have recently been particularly popular among infrastructure investors because of their stable revenues. There are predictable sources of income: Vodafone and other network providers usually conclude long-term rental agreements with the tower companies.
Europe’s telecom groups originally operated their own tower portfolios independently of each other. In the meantime, however, the industry is moving to separate the antenna and tower network from each other.