Vodafone Group invites pitches for $2 billion tower IPO

By Ruth David, Dinesh Nair and Myriam Balezou

Vodafone Group Plc has invited advisers to pitch for a role on the planned initial public offering of its European towers unit, which could raise more than 2 billion euros ($2.2 billion), people with knowledge of the matter said.

The UK carrier asked potential underwriters to submit proposals next month, according to the people, who asked not to be identified because the information is private. It plans to list the business as soon as early 2021 and is considering seeking a valuation of 10 billion euros to 20 billion euros, the people said.

Rothschild is helping manage the IPO preparations as financial adviser to Vodafone, according to the people. The role typically involves overseeing the selection of deal arrangers as well as making recommendations on other aspects of the listing.

Telecom operators are increasingly seeking ways to extract value from their tower portfolios. Wireless infrastructure has been drawing interest from investors attracted to the steady, long-term nature of the assets. Vodafone’s listing could help revive the European IPO market, which is on track for the slowest first half since 2012, according to data compiled by Bloomberg.

Vodafone is leaning toward Frankfurt as a listing venue, though no final decisions have been made, the people said. Deliberations are at an early stage, and the amount it ultimately raises will depend on market conditions and the percentage stake it sells in the offering, according to the people.

Representatives for Vodafone and Rothschild declined to comment.

Vodafone announced last year that it had plans to carve out its towers business and consider it for an IPO or minority stake sale. The new unit was expected to include about 61,700 masts in 10 countries, Vodafone said at the time, with operations likely to generate about 900 million euros of annual earnings before interest, tax, depreciation and amortization.

London and Frankfurt are both strong contenders for a listing venue, Vodafone’s Chief Executive Officer Nick Read said on a May media call.