Telefónica has begun to distribute the sales notebooks of the fiber optic partnership that it shares with Liberty Global in the United Kingdom through the operator Virgin Media O2 (VMO2). The company’s objective is to earn around 1,200 million euros with the placement of between 20 and 40% of its infrastructure company. According to Mergermarket, the aforementioned Spanish-British NetCo could be valued between 4,000 and 5,000 million pounds (4,800 and 6,000 million euros), in an operation that could interest four capital funds specialized in this type of assets: Global Infrastructure Partners (GIP), BlackRock, EQT Infrastructure and Asterion Industrial Partners, the sources added. Large pension funds and direct institutional investors also appear on the same list of potential candidates, such as AustralianSuper, CPPIB, PSP and QIC.
The same sources have pointed to the end of next January as the deadline to receive the first round offers, which is why VMO2 is accelerating these days the details of a future transaction that has financial advice from Barclays and Lion Tree. In fact, these two banks began the distribution of information memoranda among potential suitors a little over a week ago. To questions from this newspaper, Telefónica sources declined to comment..
Last February, Telefónica and Virgin Media formed a shared company, designed to integrate the Spanish operator’s cable and fiber network, until then deployed in 16.2 million premises throughout the United Kingdom.
This VMO2 decision emerged with the aim of becoming the main alternative to Openreach, owned by the former incumbent British Telecom (BT)in that market. At the time of the creation of NetCo, Telefónica and Virgin Media specified that their private fiber assets – available in four million properties – would not be part of the new NetCo. Nor would it integrate with the company Nexfibre, controlled by Liberty Global, Telefónica and Infravia, a firm specialized in the expansion of fiber in rural areas. However, between VMO2, Nextfibre and NetCo, the British subsidiary of Telefónica committed ten months ago to cover up to 23 million homes in the United Kingdom, thus reaching 75% of the market in that country.
Telefónica has turned the partial sale of its fiber assets into one of the most interesting deals in recent years. This is the case of the Spanish company Bluevía (Spain), FiBrasil, Unsere Grüne Glasfaser (Germany), the aforementioned Nexfibre (United Kingdom), OnNet Chile and OnNet Colombia. In these last two countries, it has partnered with KKR. In Brazil, the Spanish group has joined the Canadian fund CDPQ in the company FiBrasil.
In Spain, Telefónica owns a majority stake of 55% of Bluevía (30% through Telefónica España and 25% through Telefónica Infra), and the consortium formed by Vauban Infrastructure Partners and Crédit Agricole Assurances controls the remaining 45%.
The exception to the rule is Peru, a market where the Spanish operator broke down last November with KKR and the Chilean Entel due to disagreements regarding the valuation of 64% of the fiber company Pangea.
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