Spain's Cellnex to buy Arqiva's telecoms division in $2.5 billion deal

Spain's Cellnex to buy Arqiva's telecoms division in $2.5 billion deal

Reuters  | Oct 08, 2019 15:56

Spain's Cellnex to buy Arqiva's telecoms division in $2.5 billion deal

By Joanna Jonczyk-Gwizdala, Andrés González and Pamela Barbaglia

MADRID/LONDON (Reuters) - Cellnex (MC:CLNX) has agreed to buy the telecoms division of Britain's Arqiva for 2 billion pounds, expanding the Spanish company's phone tower network to more than 50,000 sites across Europe.

The wireless infrastructure company whose shares rose 3% in morning trade to hit a record high, said it would launch a rights issue worth 2.5 billion euros ($2.75 billion) in part to fund the deal.

The transaction gives it about 7,400 owned sites and the rights to market about 900 additional sites across Britain.

Cellnex has snapped up tens of thousands of phone tower sites in Europe in the past three years, making the Barcelona-based company a key player in the consolidation of the telecoms infrastructure market.

This deal brings its portfolio to about 53,000 sites in Spain, France, Netherlands, Britain, Italy, Switzerland and Ireland.

Cellnex Chief Executive Tobias Martinez said Arqiva's "strong UK asset-base, revenues and financial profile, combined with its long history at the heart of UK digital infrastructure, make it a perfect addition to our operations".

Arqiva, whose main investors include Canada Pension Plan Investment Board (CPPIB) and Macquarie, intends to use most of the proceeds to pay down debt.

The company previously ditched plans to sell or list on the London Stock Exchange two years ago.

But CPPIB and Macquarie resumed efforts to cash out earlier this year, sources familiar with the deal told Reuters, and started looking into a possible break up of the company.

Arqiva's portfolio consists of sought-after telecom towers as well as traditional broadcasting masts whose future is challenged by digital technologies and online streaming.

To keep the plan confidential, CPPIB and Macquarie avoided launching a full blown auction and entered bilateral talks with Cellnex during the summer, another source said.

The pair wanted to ensure Cellnex wouldn't be distracted by other upcoming tower disposals as Vodafone (L:VOD) announced in July plans to separate its own mobile mast operations in Europe into a new company.

Cellnex in turn wanted to sign a deal and secure the financing before the Brexit deadline on Oct. 31, the first source said.

Cellnex is seeking to raise 2.5 billion euros from its shareholders, offering 9 shares for every 31 shares held by investors at 28.85 euros each.

Shareholders representing about 36% of the company have already committed to taking up their share of the rights issue, and the deal is fully underwritten by the banks managing the deal, according to one of the banks.

A second banking source said the subscription period will run from October 11 to 25, allowing the deal to be priced ahead of the crucial Brexit deadline of Oct. 31.

JPMorgan (NYSE:JPM), Morgan Stanley (NYSE:MS) and Goldman Sachs (NYSE:GS) are joint global coordinators and joint bookrunners along with Banca IMI (LON:IMI), Banco Santander (MC:SAN), CaixaBank, Citi, Deutsche Bank (DE:DBKGn), HSBC and Mediobanca.


Arqiva's Chief Executive Simon Beresford-Wylie said in a statement the deal provided "stability and a focus for our future" and that the company would focus on its broadcast infrastructure business.

Credit Suisse (SIX:CSGN) analysts said they saw scope for Cellnex to play a bigger role in building new towers in the expanding British market, which had four mobile operators and 4G coverage that was below the European average.

"We see (the) Arqiva portfolio as a good starting point for Cellnex to benefit from this growth," they wrote.

Beyond the Arqiva deal, Cellnex said it was boosting its resources to fund some of the other projects it has lined up, and was still looking for more purchases.

"Our aim is to consolidate and expand our position in the seven countries ... where we are present while still paying attention to projects that might come up in other European markets," Martinez said.

He said he expected growth opportunities linked to the rollout of next-generation 5G infrastructure, deploying fibre-optic cables and small cell technology and placing data processing centres closer to users.

Lazard was sole adviser to Arqiva.

Related News

Latest comments

Add a Comment
Please wait a minute before you try to comment again.
Write a reply...
Please wait a minute before you try to comment again.

Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.

English (USA) English (India) English (Canada) English (Australia) English (South Africa) English (Philippines) English (Nigeria) Deutsch Español (España) Español (México) Français Italiano Nederlands Português (Portugal) Polski Português (Brasil) Русский Türkçe ‏العربية‏ Ελληνικά Svenska Suomi עברית 日本語 한국어 简体中文 繁體中文 Bahasa Indonesia Bahasa Melayu ไทย Tiếng Việt हिंदी
Sign out
Are you sure you want to sign out?
Saving Changes


Download the App

Get free real time quotes, charts and alerts on stocks, indices, currencies, commodities and bonds. Get free top of the line technical analysis/predictors. is better on the App!

More content, faster quotes and charts, and a smoother experience is available only on the App.