LONDON, February 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 secure a chunk of their investment collect. according to two sources familiar with the matter.
While a decision on the valuation of Cornerstone Telecommunications Infrastructure Limited (CTIL) has not yet been made, the company could fetch a price of more than 3 billion euros ($3.21 billion) based on recent deals in the industry and Analyst estimates, the sources said. who asked to remain anonymous.
CTIL is attracting interest from pension funds, including Britain’s largest, the Universities Superannuation Scheme (USS), which has begun preparatory work for a possible offer, two of the sources said.
Telefonica, Liberty Global and USS all declined to comment.
In a series of telecom tower deals in Europe, infrastructure investors are competing for a slice of the continent’s largest tower networks, in part because of their stable cash returns and long-term contracts.
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CTIL’s adjusted earnings before interest, taxes, depreciation and amortization (Ebitda) remained flat at 147 million euros for the six months to September as the company added more locations and tenancies, according to the latest published results.
Telefonica and Liberty Global are working through their joint venture Virgin Media O2 with JPMorgan Chase & Co. and Goldman Sachs Group Inc. to sell half of their combined 50 percent stake in CTIL, the people said.
Vodafone (VOD.L) owns 50% of CTIL through its Frankfurt-based subsidiary Vantage Towers (VTWRn.DE) and has no plans to reduce its stake, the people said.
According to the sources, Telefonica and Liberty Global do not plan to solicit a bid for the stake from Vantage Towers for competitive reasons.
A spokesman for Vantage declined to comment.
Traditional global infrastructure funds’ appetites at CTIL are likely to be limited as many of these larger players would have concentration problems as they already own competitors, one of the sources said.
Founded in 2012, CTIL is the largest tower company in the UK, managing around 14,200 macro sites nationwide, according to the Vantage website.
CTIL’s EbitdaAL, which deducts rental costs from EBITDA, reached EUR 62.8 million in the six months to September.
EbitdaAL is typically used as a measure of the underlying profitability of telecom tower companies. In recent deals, such as Brookfield’s and DigitalBridge’s acquisition of a 51% stake in Deutsche Telekom’s telecom tower unit, buyers have paid multiples of 27 times EbitdaAL.
USS, which has total assets under management of £82 billion ($98.86 billion), also owns stakes in London’s Heathrow Airport and Bruc Energy, which is developing renewable energy projects in Spain and Portugal.
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Reporting by Andres Gonzalez, editing by Louise Heavens
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