Vodafone's towers arm to float in Frankfurt by end March

LONDON (Reuters) – Vantage Towers, the mobile masts company spun out of Vodafone Group, plans to float in Frankfurt by the end of March in a deal that could value it at up to 18 billion euros ($22 billion), making it Europe’s largest listing so far this year.

FILE PHOTO: Different types of 4G, 5G and data radio relay antennas for mobile phone networks are pictured on a relay mast operated by Vodafone in Berlin, Germany April 8, 2019. REUTERS/Fabrizio Bensch/File Photo

Duesseldorf, Germany-headquartered Vantage operates about 82,000 towers across 10 countries, where it is usually the leading or second largest supplier. Germany is its largest market, which is one of the reasons for the venue of the IPO.

Vodafone said on Wednesday it would sell a “meaningful minority” stake to create a liquid market in Vantage Towers’ shares. No new shares will be on offer, meaning Vantage will not reap proceeds from the deal.

People familiar with the matter said stock worth about 3 billion euros would be sold, possibly giving the company a valuation of 15-18 billion euros.

That would make Vantage the largest European listing of the year in a busy season for new issues that has seen $12 billion Polish firm InPost, $10 billion German used-car trading platform AUTO1 and $5 billion British boot brand Dr. Martens join stock markets.

With that valuation, Vantage would also be Germany’s largest listing since energy group Innogy’s 20 billion-euro debut in 2016.

Vantage said late last year it expected to report pro forma adjusted core earnings of up to 540 million euros in the financial year to the end of March 2021.

Most rival telecom mast companies such as Cellnex, American Tower, Crown Castle and SBA Communications trade at 25-30 times their core earnings.

Vantage said its dividend policy was to pay out 60% of recurring cash flow and that it intended to pay out 280 million euros this financial year.

It is on track for a leverage ratio of four times core earnings at the end of March, allowing it to balance investment, acquisitions and returns, it added.

Bank of America, Morgan Stanley and UBS are organising the IPO with the help of Barclays, Berenberg, BNP Paribas, Deutsche Bank, Goldman Sachs and Jefferies.

($1 = 0.8228 euros)

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