Canadian pension fund PSP Investments is reportedly in the process of securing a €1.5bn (US$2.04bn) debt financing to fund a bid for the French assets of towerco TDF.
PSP, together with London-based fund manager Arcus Infrastructure Partners, have…
Canadian pension fund PSP Investments is reportedly in the process of securing a €1.5bn (US$2.04bn) debt financing to fund a bid for the French assets of towerco TDF.
PSP, together with London-based fund manager Arcus Infrastructure Partners, have already submitted an informal bid for the unit and are considering making a formal one soon, according to Reuters citing baking sources.
TDF declined to comment while PSP was not immediately available.
A few weeks ago, US private equity firm Dering Capital withdrew its €3.7bn (US$5bn) offer to buy the assets after failing to raise enough equity funding.
However, it was suggested at the time that Dering could be interested in a minority stake. That speculation also claimed that PSP, which had previously expressed an interest in TDF, could be set to make an offer in the region of €3.5bn.
Shareholders TPG, Ardian, FSI and Charterhouse, advised by Goldman Sachs and Rothschild, first initiated plans to sell part of the company for around €4bn (US$5.4bn) last year in order to repay its debt, then estimated at €3.8bn.
TDF’s €4bn valuation is based on a multiple of 10.5-11.5 times the French assets’ FY2012 EBITDA of €380m.
At the time Dering, which was founded by former Blackstone executive Ben Jenkis, was reported to be competing against Canadian pension funds CPPIB and PSP as well as telecoms tower company American Tower. But with TDF’s shareholders said to be sticking to their asking price, the other suitors withdrew from the process.
The funding sought by PSP and Arcus is expected to have an investment-grade style structure unlike Dering’s leveraged financing, which was lined up by BNP Paribas, Citigroup, Credit Suisse and Goldman Sachs, Reuters wrote.
Last month, a report suggested that rather than finding another buyer in the medium term, TDF may instead seek to extend the maturity of its debt by three years to 2019. A refinancing could also be on the cards. In 2011, the towerco won approval to renegotiate its €4.35bn debt load, most of which is now due in 2016.
PE firms TPG and Ardian, then known as Axa Private Equity, acquired a 60% stake in TDF in 2006 for €4.85bn (US$6.3bn). The rest of the company is split between French state-owned fund FSI (24%) and UK’s Charterhouse (14%).
TDF provides radio and TV transmission services using its satellite, internet and tower operations, and is present in France, Germany, Poland, Spain, Estonia and Monaco. It recently sold its Hungarian unit back to the government, at a loss, for US$250m.
