Vodafone surges on possible tower IPO

Bloomberg

Vodafone Group Plc shares gained the most in more than a decade on the phone carrier’s plan to carve out its towers business and consider an initial public offering or minority stake sale of the new unit.
The stock rose as much as 10.4 percent, the biggest intraday jump since November 2008, after the carrier announced plans to separate Europe’s largest towers portfolio alongside financial results that beat expectations. The business, which will operate independently by May 2020, will include 61,700 masts in 10 countries, Vodafone said in a statement.
The move comes out of a review started last year by Nick Read, shortly after he became chief executive officer, to consider how to raise money from infrastructure.
Since then, Read has been pursuing infrastructure-sharing with rivals. The proceeds would help the cash-strapped company lower debt as it’s trying to fund the rollout of fifth-generation mobile networks.
Vodafone and Telecom Italia SpA have now finalised a towers-sharing partnership in Italy to create the country’s largest mast operator, people familiar with the matter said.
As part of the deal, Vodafone will own about 37 percent of Telecom Italia’s mobile tower unit Inwit SpA, the people said.
Vodafone said it plans to monetise a substantial part of the broader towers unit over the next 18 months after receiving several offers for tower assets.
It could IPO or sell a minority stake in the broader unit, as well as selling minority or majority stakes of assets in individual countries.
“We are moving very quickly,” Read, who took over from Vittorio Colao in October, said on a call with journalists. “It’s one of the things that I prioritised coming into the role.”
Vodafone joins European carriers including Altice Europe NV and Iliad SA in taking advantage of rising demand for telecom infrastructure from private equity funds flush with cash.
Telecom infrastructure businesses command richer valuations than phone carriers, because they have steady income streams that are insulated from the underlying consumer.