Vodafone’s Vantage towers climb after Germany’s biggest IPO since 2018
FRANKFURT (Reuters) – Shares of Vodafone’s Vantage Towers rose on Thursday in Germany’s largest IPO since 2018, benefiting from a strong investor appetite for infrastructure assets with stable returns.
Its shares climbed 4.8% from the offer price of 24 euros, which was in the low end of the 22.5-29 euro market range, and rose 1.9% at 24.45 euros at 11:19 GMT.
If a € 300 million over-allotment option, or greenshoe, is exercised, Vodafone will earn € 2.3 billion ($ 2.8 billion) from the initial public offering (IPO) which valued Vantage Towers at 12 , 1 billion euros.
“This IPO unlocks value for our shareholders: it demonstrates the value of our tower assets in a 5G world,” said Vodafone CEO Nick Read.
Vodafone has said it will use the proceeds to reduce its debt, which stands at around € 69 billion, according to data from Refinitiv.
It was one of the biggest announcements this year in Europe, which saw a wave of debuts including Polish e-commerce company InPost, German used car trading platform AUTO1 and the brand British shoe designer Dr. Martens.
Vantage Towers was also the highest listing in Germany since October 2018, when brake maker Knorr Bremse raised $ 4.4 billion.
Telecommunications towers have become the target of several big deals as Spain’s Cellnex and US-based Tower Corp try to expand in Europe for the deployment of next-generation 5G technology.
‘A LOT OF INTEREST’
While outright selling the towers would bring in heaps of money, many telecommunications companies are looking to start tower businesses or start joint ventures with independent companies, in order to retain some of the potential future growth.
“Mobile operators and other companies, for example in the Internet of Things industry, are very interested in talking to us in the coming months,” Vantage chief executive Vivek Badrinath told Reuters.
Upgrading networks, including telecommunications towers, to faster 5G technology will absorb some $ 890 billion between 2020 and 2025, according to the industry body of the GSMA.
European operators are increasingly willing to leverage their assets to help fund these upgrades. Assuming Vantage Towers’ green shoe is fully exercised, Vodafone would still own 81% of the Düsseldorf-headquartered tower company.
Vantage operates 82,000 towers in 10 countries, where it is typically the first or second operator. Germany is its biggest market and Vodafone is its biggest customer.
Demand during the IPO has repeatedly exceeded the stocks on offer, with strong demand from global investors and industry specialists. So-called core investors received 41%, the bookkeepers said.
Investor and infrastructure operator Digital Colony and Singapore-based global equity fund RRJ had agreed to purchase a total of € 950 million in shares.
Bank of America, Morgan Stanley and UBS organized the IPO with help from Barclays, Berenberg, BNP Paribas, Deutsche Bank, Goldman Sachs and Jefferies.
($ 1 = € 0.8377)
(Reporting by Arno Schuetze and Nadine Schimroszik; Editing by Riham Alkousaa and David Clarke)