HomeAccessTelefónica and Liberty Global looking to offload 50% of UK towerco?

    Telefónica and Liberty Global looking to offload 50% of UK towerco?


    Meanwhile, Cornerstone’s other shareholder, Vantage Towers, is running out of time to sell a stake before H1 earnings report

    Telefónica and Liberty Global are mulling the sale of the UK tower operator Cornerstone of which they own half, according to according to Bloomberg.

    Cornerstone was set up back in 2012 by the Spanish group’s UK operation, O2, and Vodafone UK in 2012 to reduce costs and duplicated effort concerning sites.

    Last year O2 and Liberty Global’s Virgin Media merged while Vodafone’s placed its European tower assets into Vantage Towers and sold just over an 18% stake in an initial public offering on the Frankfurt Stock Market.

    Cornerstone is now owned 50:50 by Vantage Towers and Liberty Global. It has about 20,000 sites and is valued at around £10 billion (€11.53 billion). Apparently the proceeds would be ploughed into Virgin Media O2’s ambitious fibre build out in the UK.

    In July, Virgin Media O2’s parent companies created a joint venture with French infrastructure investor InfraVia Capital Partners to build between 5 million and 7 million new fibre connections in Britain.

    There is likely to be considerable interest in a stake in Cornerstone either in the shape of towercos like Barcelona-based Cellnex or American Tower Company which have grown rapidly, snapping up assets as operator groups strive to cut debt, or a consortium of infrastructure investors.

    Meanwhile, Vodafone is hoping to reach agreement with investors to sell them a stake in Vantage Towers by 15 November when it is due to report its half-year earnings, according to Reuters. The operator has been under considerable pressure from activist investors to generate more value for shareholders.

    Reuters says that Vodafone is evaluating the options of halving its almost 82% stake in Vantage Towers or selling 25% of it to generate cash and improve profitability.

    In mid-October Vantage Towers was valued at €13 billion, having dropped 18.3% since the start of the year. A consortium of investment firms including KKR and Global Infrastructure Partners (GIP) is thought to be in negotiation.

    A spokesperson for Vodafone said the company had previously expressed its “preference to move to co-control and deconsolidate Vantage”, adding in doing so Vodafone would be “pragmatic and value oriented”, pursuing whatever solution was in the best interest of its shareholders.