Vodafone is being approached by global infrastructure funds to make an investment in Vantage Towers, its $16 billion mast company. However, the telecom giant is preferring an industry merger.
Global Infrastructure Partners, Brookfield and a couple of more investment firms have submitted their unsolicited proposals lately valuing the company at $16.57 billion or 15 billion euros. The figure has not yet been announced officially and is currently being reported by citing anonymous sources.
The source added that the offers made until now are for a majority stake in the company and Vodafone is yet to make a decision. It is studying the proposals. Meanwhile, the Vantage Towers shares jumped 11.4 percent at a point with the announcement. It is the biggest rise to 33.59 euros and later rebound was witnessed.
Simultaneously, the shares of Vodafone jumped 1.4 percent and it outperformed the rivals which were basically flat. It owns 81 percent of the Vantage Towers, which is listed in Frankfurt.
Vodafone is reluctant to talkwith the investors and believes in an industry merger with the DFGM towers unit of Deutsche Telekom or Totem of Orange. No official comment has yet been received from Orange, Brookfield and Vodafone.
Deutsche Telekom spokesperson said they are reviewing their strategic options and didn't elaborate the plan. Moreover, Vodafone is facing pressure from Cevian Capital to make its portfolio simple, enhance strategy in important markets as well as boost the returns.
Earlier, Vodafone had refused an approach of 11 billion euro to focus mainly on the Spanish market but unfortunately MasMovil and Orange announced a tie-up in the country.
Telecoms executives have argued for market consolidation regularly to minimize competition and enhance profitability as cash is required by the operators to invest in rolling out 5G infrastructure.
Meanwhile, Vodafone is completely focusing on reaping out the value from its Vantage Towers stake. It is preferring an industrial merger.
Earlier in March, Deutsche Telekon was reported to have initiated an auction for its towers business and the bids are expected to come up later this month. A source said Vodafone is monitoring the progress and it is believed to be striking a deal with Orange Totem.
In the recent past, big companies have targeted taking over the telecom towers as these are burdened by huge debt as well as heavy costs. It is simultaneously learned that other independent towers including American Tower Corp and Cellnex are eyeing infrastructure deals while they are on the run to expand in Europe with their new 5G technology.