Spanish infrastructure group Abertis has announced it will spin off and list its tower business in the first half of next year.
In a presentation to investors in London this morning, Abertis laid out plans to separate its 7,700 telecoms and broadcast…
Spanish infrastructure group Abertis has announced it will spin off and list its tower business in the first half of next year.
In a presentation to investors in London this morning, Abertis laid out plans to separate its 7,700 telecoms and broadcast towers into a new unit called Abertis Telecom Terrestre (ATT), which it will float on the Madrid stock exchange in 2015, subject to market conditions.
Abertis’ board approved the IPO on Tuesday afternoon and the company has begun to pre-market the new unit today, which could be valued at US$3.8bn according to a Reuters report.
It is yet to formally hire banks for the listing but has been working with undisclosed advisers on the plan.
Abertis will use the IPO proceeds to grow its toll road business, both organically and via M&A, and to increase its financial liquidity and shareholder remuneration.
ATT will not include Abertis’ 57% stake in Hispasat, despite the satellite operator having more in common with its telecoms operations than the conglomerate’s toll roads business. Abertis believes that maximum value can be achieved by keeping ATT’s focus limited to terrestrial telecoms infrastructure.
ATT will operate independently from Abertis, with its own brand, corporate image and management team, although the Barcelona-based group will retain a minority stake in the spun-off entity.
Abertis said the separation would allow ATT to grow faster as it would be able to take on more debt for expansion, an area where Abertis is restricted due to its commitment to maintain its corporate credit rating.
Speaking at the presentation this morning, CFO Jose Aljaro said there were significant opportunities in the pipeline for growth in the European tower sector and that is where ATT’s focus would be for the foreseeable future.
Aljaro pointed to the tenders which Wind Telecomunicazioni and Portugal Telecom were conducting to sell towers as two possible routes for growth. The CFO added that there could be further opportunities in Italy and in Spain, where Orange is looking to sell sites.
However, Abertis is not tempted to enter the Latin American tower market which has been buoyant in recent years. Explaining this decision, Aljaro said that the presence of independent towercos in Latin America was a lot more established than it was in Europe, which is why Abertis sees more opportunities closer to home.
In May, Abertis acquired Italy’s TowerCo, which operates mobile telecoms towers on toll roads in Italy, from Italian motorway operator Atlantia for €94.6m.
Since then, the company has been rumoured as a potential suitor for a number of European tower deals, including the sale of Wind’s and Telecom Italia’s tower assets and, most recently, the disposal of Portugal Telecom’s 3,000 sites.
Abertis posted US$4.5bn in revenues and US$3bn in EBITDA for Q3 2014, a 7% and 11% increase, respectively, over the same period in 2013.
It also announced that it would increase its ordinary dividend per share by 5% per year until 2017 and will carry out a share buyback programme of up to 5%, in order to distribute over €2bn to shareholders over the next three years.
