Monday, 15 August 2022

New Zealand tower sales on the horizon

by Harry Baldock, Total Telecom
Monday 04 July 22

Both Vodafone NZ and Spark have called for binding bids to be submitted for the purchase of major stakes in their mobile tower units

Today, Vodafone NZ has announced that it now expects binding binds for its tower unit to be submitted by July 15.  An 80% stake in the unit is being made available, with three bidders left vying for ownership: KKR-backed John Laing; a joint bid from Northleaf Capital and InfraRed Capital Partners…

Today, Vodafone NZ has announced that it now expects binding binds for its tower unit to be submitted by July 15. 

An 80% stake in the unit is being made available, with three bidders left vying for ownership: KKR-backed John Laing; a joint bid from Northleaf Capital and InfraRed Capital Partners; and another joint bid from Ontario Teachers’ Pension Plan and NZ Super.

Vodafone NZ currently owns around 1,500 towers which analysts suggest could fetch a price of up to $1 billion.

Vodafone is not the only NZ operator to be in the process of offloading its mobile towers. Rival Spark is also preparing to auction a 70% stake in its tower unit, saying two weeks ago saying that it had shortlisted five companies to bid. Indicative bids are expected at the end of this week.

New Zealand’s third-place mobile player, 2degrees, is seemingly the odd one out here, with no apparent plans to sell its roughly 1,800 mobile towers. However, it could just be a matter of time, with the company currently focused on smoothing out operations following the roughly $1 billion merger with Vocus early last month.

Investor interest in passive mobile assets has been extremely high in recent years, with major telcos spinning off their infrastructure units around the world in exchange for quick cash that can be used to reduce debt and accelerate their rollout of next-generation technology. 

Just across the Tasman Sea, tower deals in Australia have raised enormous sums of money for their respective telcos. Last year, Telstra sold a 49% stake in its tower unit InfraCo for $2.1 billion and Optus sold a 70% in Australian Tower Network for $1.3 billion, while TPG is currently in the process of offloading 100% of its tower assets to OMERS for roughly $650 million. 

Whether similar valuations can be achieved in New Zealand remains to be seen. 


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