Telefónica sells 17% of its UK tower subsidiary for 430 million

Posted On: October 31, 2023

Virgin Media O2 (VMO2) announced this afternoon that it has reached an agreement to sell 16.67% of Cornerstone, its UK tower business. The buyer was British infrastructure fund GLIL.

VMO2 It is a joint venture owned 50% by Spain’s Telefónica and North American telecommunications group Liberty Global. For this part, Base It is also 50% owned by VMO2 itself and vehicles controlled by V.odafone.

As reported by Telefónica and Virgin Media, VMO2 “will receive approx 360 million pounds (413 million euros)which represents an 18.7x multiple of EBITDAaL [ebitda después de alquil

VMO2 es una sociedad conjunta participada al 50% por la española Telefónica y el grupo norteamericano de telecomunicaciones Liberty Global. Por su parte, Cornerstone está participado, también, al 50%, por la propia VMO2 y un vehículo controlado por Vodafone.

Según informaron Telefónica y Virgin Media, VMO2 “recibirá aproximadamente 360 millones de libras (413 millones de euros), lo que representa un múltiplo de 18,7 veces sobre el EBITDAaL [ebitda después de alquileres] Adjusted Cornerstone in March 2023.” The operation involves a valuation of Cornerstone of approximately 2,480 million euros. Following the sale, VMO2 will own 33% in Cornerstone.

In practice VMO2 “will continue to drive Cornerstone, along with Vantage Tower”, a company in which Vodafone shares shareholding with KKR and GIP, and “will maintain proportional consolidation of Cornerstone in its financial statements”.

The sale of the tower company’s minority package was carried out through VMO2 holding, which is Cornerstone’s shareholder. When the operation is complete, “In the next few weeks“, VMO2 will own 66.67% of HoldCo and GLIL, its new partner, the remaining 33.33%.

Main operator of ‘teleco’ towers

Cornerstone defines itself as the UK’s premier operator of telecommunications towers, with 20,000 locations, which is mainly used by VMO2 and Vodafone UK. The company will continue to be a an important supplier for VMO2 and the sale will not change its commercial network sharing agreement with Vodafone.

GLIL Infrastructure is a British pension fund company and beat other investment companies in an auction conducted by Cornerstone. GLIL manages committed capital 3.6 billion pounds (4,150 million euros) in the form of assets such as renewable energy (wind), railways, hospitals, schools and water management companies.

Reaction

VMO2 CEO Lutz Schüler said: “We are monetizing some of our towers as we roll out 5G in the UK.” Meanwhile, Simon Davy, GLIL’s investment director, has assured that they “will help provide local capital to develop critical mobile phone infrastructure.”