By Douglas Busvine
BERLIN, Nov 19 (Reuters) - Cellnex, the Spanish
telecoms infrastructure company, would be interested in buying
into Telefonica's mobile towers business should the
opportunity arise, CEO Tobias Martinez said on Thursday.
The expression of interest by Martinez came after Telefonica
Chief Operating Officer Angel Vila said the company would
consider relinquishing control to give its Telxius subsidiary
more headroom to grow.
"My wish is always to acquire the towers of all of the
telecom operators. Why not? It's my core business!" Martinez
told the Morgan Stanley Technology, Media and Telecom
conference.
Cellnex has, through a string of audacious deals, emerged as
the leading candidate to roll up European tower assets being
cast off by operators trying to raise capital to pay for costly
network upgrades to launch 5G services.
The Barcelona-based company has just pulled off its biggest
acquisition to date by buying 24,600 towers across Europe from
Hong Kong's CK Hutchison for 10 billion euros ($11.83
billion).
Pure-play towers operations are able to crank up financial
leverage to acquire infrastructure assets that produce
predictable and growing revenue streams as data volumes grow -
an approach applauded by investors who have sent Cellnex shares
up by 45% this year.
Some other telecoms operators are looking to get in on the
act, with Vodafone planning to float its Vantage Towers
operation on the Frankfurt Stock Exchange next year after
carving it out into a separate business.
UP AND DOWN
Cellnex's equity market value of around 24 billion euros now
exceeds that of Telefonica, whose shares have dropped this year
as its weak operating performance raised questions over its
ability to support a debt pile of 43 billion euros.
Vila, speaking at the Morgan Stanley conference on
Wednesday, said Telefonica would consider reducing its stake in
Telxius below half - a move that would give the business more
scope to leverage up and do deals.
"If you have restriction on leverage that independent
towercos don’t have, it is very difficult to grow
inorganically,” Vila said.
“We are open to potential options that could take us below
50% of Telxius towers provided those allow the company to
develop and grow faster.”
Telefonica owns Telxius along with private equity firm KKR
and Zara owner Amancio Ortega's investment fund
Pontegadea.
"My personal ambition would obviously be to find a way to
cooperate or to invest," Martinez said, when asked to respond to
Vila's comment. He added, however, that no talks were yet taking
place: "I don't want to speculate."
($1 = 0.8453 euros)
(Additional reporting by Mathieu Rosemain and Isla Binnie.
Editing by Jane Merriman)
Vodafone (VOD)
