US towerco Crown Castle has priced its previously announced public offering of shares at US$3.42bn by selling two different types of shares.
It will use the proceeds to fund its US$4.85bn tower deal with AT&T, announced earlier this week.
Crown Castle…
US towerco Crown Castle has priced its previously announced public offering of shares at US$3.42bn by selling two different types of shares.
It will use the proceeds to fund its US$4.85bn tower deal with AT&T, announced earlier this week.
Crown Castle priced 36 million shares of common stock at US$74 each, which would raise US$2.59bn. It also priced 8.5 million shares of mandatory convertible preferred stock at US$100 per share, which should earn the towerco US$826m after fees.
The preference shares will return a dividend of 4.5%. Each will be automatically converted on 1 November 2016 into between 1.0811 and 1.3513 share of Crown Castle common stock, based upon the volume-weighted average price of the towerco’s stock over the 20 days before the conversion.
Morgan Stanley, BofA Merrill Lynch, JP Morgan and Barclays are the joint book-running managers on the offering.
In a statement Crown Castle said the underwriters have been granted an option to buy an extra 5.4 million shares of common stock and an additional 1.28 million shares of the preferred stock. The towerco said these further offerings would be separate to the larger planned offerings.
The issuance is not contingent on the AT&T transaction completing and should the deal change or fall apart, Crown Castle will use the proceeds of the offering for other purposes, including debt repayment.
Crown Castle agreed to buy the rights to around 9,700 towers from incumbent AT&T on Monday for US$4.85bn. It will also acquire around 600 towers but lease the majority.
The company will have rights to the sites for an average of 28 years each, and has fixed price options to buy the towers as their leases expire, primarily between 2032 and 2048, for around US$4.2bn in total.
The deal takes Crown Castle’s US tower portfolio up by a third to roughly 40,000.
Alongside the stock offering, the towerco will use cash on hand and debt financing – including borrowings under its revolver – to fund the deal.
