Posted on Jul 26, 2019
Britain’s Vodafone has announced plans to separate its mobile mast operations in Europe into a new company that it potentially could list, in a move it said would unlock value for shareholders, Reuters reports.
Shares in the world’s second largest mobile operator jumped 8% in early trade to £1.43, regaining ground lost when the company cut its dividend for the first time ever in May.
Vodafone said the tower unit, which would comprise 61,700 sites in 10 markets, could have annual proportionate revenue of €1.6 billion (£1.4 billion) and core earnings of €900 million a year.
It would overtake Cellnex, currently Europe’s biggest towers group, which is valued at just over 17 times earnings. A similar multiple for Vodafone’s towers would imply a value of more than €15 billion for the assets, according to Reuters calculations.
Vodafone Chief Executive Nick Read said the tower company would be operational by May 2020, with 75% of its sites in its biggest markets of Germany, Italy, Spain and Britain.
Mobile operators across Europe have been selling or sharing their network infrastructure to cut debt, tapping into the appeal of the assets’ steady cash flows to investors.
“Given the scale and quality of our infrastructure, we believe there is a substantial opportunity to unlock value for shareholders while capturing the significant industrial benefits of network sharing for the digital society,” Read said in a statement.
He said the proceeds from listing a minority stake in the tower company, or from attracting other investors, would be used to cut Vodafone’s debt.
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