German operator Deutsche Telekom is apparently reviewing bids for its tower business from multiple suitors including Vodafone’s Vantage Towers, KKR, GIP, Cellnex and America Tower Corp.
Deutsche Telekom is reviewing proposals to sell a majority or minority stake in its subsidiary towers business Deutsche Funkturm, according to a report from Reuters. Sources claim Vantage Towers and a consortium of KKR and GIP have submitted bids to buy either 51% or take a minority interest, Cellnex is mulling over a deal that would give it majority control, and American Tower Corp is also sniffing around in some capacity.
Sources claim that while CEO Tim Hoettges has signalled he wants to ‘de-consolidate’ the business, it could still favour a minority stake sale to a financial investor, with one source is quoted as saying: “They still need to decide what’s best to do as a first step. A minority stake sale remains an attractive option given the complications of pursuing an industry tie-up.”
The anonymous sources also claimed that Deutsche Telekom aims to land a deal by the middle of the year (though discussions could only be finalised in September depending on the complexity of the deal), but it has yet to set a deadline for final bids as it is still weighing them all up.
They also claimed that a tie-up with a firm already active in Germany such as Vantage Towers would cause a lengthy regulatory review, and a package of ‘remedies’ such as asset disposals would be required in order to get it past European regulators.
A month ago it was reported – again by Reuters, which seems to have a roster of deepthroat types with their noses in proceedings – that Deutsche Telekom had begun the process of selling its towers business, representing 40,000 odd masts, for around €18 billion.
We mentioned at the time, and it’s worth repeating now that it looks like, if the sources are to be believed, things are moving in the direction of some sort of sell off: the trend of flogging something so entirely vital to an operator as its mobile masts seems like a particularly short-termist position, and presumably not a move Deutsche Telekom would opt to do unless it absolutely needed to. Only time will tell if sales such as hinted at here come back to bite operators in the future, when they could find themselves with less control than they’d like over a core part of their operations.