Mobile phone mast company may run up £2bn ‘For sale’ sign
Bidders are circling National Grid Wireless, the £2 billlion mobile-phone mast and broadcast business, after it hired Morgan Stanley to advise it on options.
The investment bank has been formally retained by National Grid, the utility that owns the mast business, as an adviser on its planned demerger. However, the spin-off, which was announced last month, has been widely seen as a move to put the unit up for sale and bidders are already sizing up the business.
The mast division has come to the market at a time when appetite for infrastructure is at fever pitch.
Specialist infrastructure funds, such as Babcock & Brown, of Australia, are expected to look at the unit, as is the Qatar Investment Authority.Their chances of pulling off a deal appear stronger given that Macquarie, the acquisitive Australian bank that recently snapped up Thames Water in an £8 billion deal, is unlikely to enter the bid battle because of regulatory challenges.
Macquarie Communications Infrastructure Group is the biggest shareholder in Arqiva, the UK’s other big transmission mast business.
Analysts said that the National Grid mast business would fetch about £2 billion.
Traditional private equity players, attracted by the recurring revenue streams drawn from the business’s long-term contracts, are also expected to cast an eye over National Grid Wireless.
The appetite among buyout firms for mast businesses was seen this year when Texas Pacific Group, together with AXA Private Equity, of France, bought a majority stake in TDF, Europe’s biggest owner of broadcast and telecoms masts and transmitters, in a €5 billion (£3.4 billion) deal, including debt.
However, private equity firms might be deterred by the higher prices that specialist infrastructure funds can afford to offer because of their structure.
National Grid Wireless, which has 14,500 sites, has contracts with businesses including the BBC, Vodafone and T-Mobile. The division includes the assets acquired in its £1.1 billion purchase of Crown Castle two years ago.
If Morgan Stanley decides to proceed with a sale of the business, it could come on to the market at the same time as a similar asset, Airwave.
The Times revealed this week that O2, Airwave’s owner, had lined up JPMorgan Cazenove to advise on a possible £2 billion sale of the secure digital radio network, which is used by emergency services across the UK.
National Grid Wireless generated revenues in the six months to the end of September of £171 million, up from £155 million in the previous year. Its owner, National Grid, said last month that it planned to demerge the business and sell Basslink, its Australian interconnector business, to focus on its core UK and US electricity and gas operations.
Steve Holliday, deputy chief executive of National Grid, said that, given its plan to focus on the UK and US gas and electricity markets, wireless transmission would be a pretty inconsequential part of the group???. Mr Holliday has been reviewing the strategy of the group ahead of taking over the top job from Roger Urwin, who is retiring, in January.
Source- business.timesonline Wireless Mobile Telecom
