Telefonica SA and Liberty Global Plc are weighing a sale of their stake in a UK towers venture to help raise funds for fiber broadband investments, people familiar with the matter said.
(Bloomberg) — Telefonica SA and Liberty Global Plc are weighing a sale of their stake in a UK towers venture to help raise funds for fiber broadband investments, people familiar with the matter said.
The telecommunications companies are working to gauge interest in their 50% holding in mast operator Cornerstone, the people said, asking not to be identified discussing confidential information. Cornerstone may be valued at about £10 billion ($11.5 billion) in any deal, the people said.
Cornerstone is a 50-50 joint venture between Virgin Media O2, the carrier jointly owned by Telefonica and Liberty, and Vodafone Group Plc’s Vantage Towers AG unit. The company owns more than 20,000 sites across the UK, according to its website.
Madrid-based Telefonica is considering the possible sale as part of its triennial strategy review, one of the people said. A sale process may kick off early next year, the people said.
Deliberations are ongoing and there’s no certainty that either Telefonica or Liberty will decide to proceed with a sale, the people said. Spokespeople for Telefonica and Vodafone declined to comment, while a representative for Liberty didn’t immediately provide comment.
Shares in Liberty rose as much as 3.8% in trading on Tuesday. The stock was up 2.6% at 12:44 p.m. in New York, giving the company a market value of $8.5 billion. Telefonica shares closed down 0.8%% in Madrid, giving it a market value of about €18.8 billion ($18.7 billion).
Europe’s phone carriers have started to sell off infrastructure assets to raise money for investments in costly fiber-optic rollouts and wireless network upgrades, as well as to cut their large debt piles. Earlier this year, Virgin Media O2 sold a stake in a new fiber firm to InfraVia Capital Partners, with a plan to invest £4.5 billion to build a network across Britain.
Tower assets, which carriers once saw as vital to their business models, are attractive to investment firms thanks to their steady, predictable returns. A host of strategic and financial investors, including KKR & Co. and Global Infrastructure Partners, have expressed interest in buying a stake in Frankfurt-listed Vantage.
–With assistance from Thomas Seal.
(Updates with shares in sixth paragraph.)
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