HomeAccessTelefónica auctions village networks as slices of private equity

    Telefónica auctions village networks as slices of private equity


    That’s show how to monetise rural life

    Telefónica has admitted Allianz Global Investors and Canadian pension fund CDPQ to the final stages of its auctioning of a slice of its rural fibre network in Spain, which serves three million homes in small villages. French investment firm Vauban Infrastructure Partners has also been shortlisted to carry out due diligence on the unit, which has been valued at €2 billion ($2.15 billion), Reuters’ has said. Meanwhile, Dutch pension fund PGGM may ally itself with Allianz as part of a consortium, as Vauban seeks a bidding partner, other Reuters sources have divulged.

    Funds for fibre

    Telefónica, advised by BBVA and AZ Capital, is selling a minority stake of about 45% of the business, which operates in towns with fewer than 20,000 inhabitants. The stake sale will free up much-needed cash for debt-laden Telefónica to fund the rollout of new broadband infrastructure in rural areas in Spain, as well as in Germany and Brazil where the telecoms giant aims to reach a market penetration of up to 97% by 2024. Telefónica is already partnering with Allianz and CDPQ to offer similar fibre services to scarcely populated areas in Germany and Brazil, respectively.

    More equity vicario?

    Private equity and infrastructure funds have been investing heavily in Spain’s fibre network, with U.S. buyout fund KKR and European rival Ardian clinching deals last year for Spain’s biggest dark fibre operator or Reimtel and fibre player Adamo, respectively. In May, consultancy Axa Partners and Swiss Re bought neutral wholesale fibre operator Lyntia Networks, which controls a 43,000 km fibre network in Spain.