News: Vodafone’s Vantage Towers climbs after Germany’s biggest IPO since 2018.
FRANKFURT (Reuters) – Vodafone’s Vantage Towers shares rose on Thursday in Germany’s largest stock market debut since 2018, benefiting from strong investor demand for infrastructure assets with stable returns.
The stock rose 4.8% from the € 24 offer price, which was at the lower end of the € 22.5-29 marketing range, and rose 1.9% to € 24.45 at 1119 GMT.
If a € 300 million over-allotment option or greenshoe is exercised, Vodafone will earn € 2.3 billion from the IPO that valued Vantage Towers at € 12.1 billion.
“This IPO creates added value for our shareholders: it shows the value of our towers in a 5G world,” said Nick Read, Chief Executive of Vodafone.
According to Refinitiv data, Vodafone will use the proceeds to reduce debt, which amounts to around 69 billion euros.
It was one of the biggest deals this year in Europe, with numerous debuts including Polish e-commerce company InPost, German used car trading platform AUTO1 and British shoe brand Dr. Martens.
Vantage Towers was also the largest publicly traded listing in Germany since October 2018, when brake maker Knorr Bremse raised $ 4.4 billion.
Telecommunications towers have become the target of several large businesses as Spain’s Cellnex and US-based American Tower Corp battle to expand next-generation 5G technology in Europe.
While selling towers directly would make a ton of money, many telecommunications companies are looking to outsource tower businesses or create joint ventures with independent companies to sustain some of the potential future growth.
“Cellular operators and other companies, such as those in the Internet of Things, are keen to speak to us over the next few months,” Vivek Badrinath, Vantage chief executive, told Reuters.
Upgrading networks, including telecom towers, for faster 5G technology will cost around $ 890 billion between 2020 and 2025, according to the GSMA industry organization.
European operators are increasingly willing to use their assets to fund these upgrades. Assuming the Vantage Towers greenshoe is fully exercised, Vodafone would continue to hold 81% of the Düsseldorf-based tower company.
Vantage operates 82,000 towers in 10 countries where it is usually the leading or second largest operator. Germany is the largest market and Vodafone is the main customer.
The demand at the IPO exceeded the stocks offered many times over, with the demand from global investors and industry specialists being strong. So-called cornerstone investors got 41%, the bookrunners said.
Infrastructure investor and operator Digital Colony and Singapore-based global equity fund RRJ had agreed to buy shares worth a total of € 950 million.
Bank of America, Morgan Stanley and UBS organized the IPO with the help of Barclays, Berenberg, BNP Paribas, Deutsche Bank, Goldman Sachs and Jefferies.
($ 1 = 0.8377 euros)
Reporting by Arno Schuetze and Nadine Schimroszik; Adaptation by Riham Alkousaa and David Clarke
Original Source © Reuters