Another major telecoms tower company appears to be heading to the market, with suggestions Macquarie-backed Axicom could be looking for a buyer.
Apparently, a number of Axicom investors are keen to exit the business.
Telecoms towers are in demand from infrastructure investors, eager to find opportunities to gain stable returns in a low interest rate environment.
Axicom dropped out of the race to buy the $2bn portfolio of Australian telecoms towers owned by Singtel’s Optus last month in what was initially a highly competitive auction.
There was talk earlier that one of the parties bidding for the Optus towers could itself be subject to an offer from another rival at a time when so much money is casing safe, low risk assets like telecoms towers.
Crown Castle was purchased for $2bn in 2015 by a consortium led by Macquarie Infrastructure and Real Assets, but the thinking now is that the value of the portfolio would be far higher, with 2000 towers in the portfolio rather than 1700.
The business was later renamed Axicom.
Sources say some, not all, of Axicom shareholders are keen sellers, which could mean that only part of the business is offloaded.
At the time of the Axicom acquisition from the US-based Crown Castle International, the buyers included MIRA and one of its managed funds and Unisuper, which has $100bn of funds under management, along with the UBS International Infrastructure Fund II.
Axicom is Australia’s largest independent owner of mobile communications infrastructure and about 2000 wireless communications towers nationally.
Its largest customers are mobile network operators Telstra, Optus and Vodafone Australia, and its towers provide communications infrastructure for the vast majority of mobile device users nationally.
It also provides services for NBN, emergency services and various state and federal government agencies, and wireless and broadband data service providers.
Axicom also designs, builds, maintains and manages towers.
The potential sale comes as final bids are due for Optus towers this week.
Left in the Bank of America-run competition are Canada’s Ontario Teachers’ Pension Plan and the Queensland Investment Corporation, which are advised by Citi and Gresham.
Other bidders are Canadian private equity fund Brookfield, AustralianSuper, advised by Jefferies, and the Symphony Consortium, comprising Stilmark, backed by Canada-based OMERS Infrastructure, and ATN International.
The Symphony Consortium is advised by Royal Bank of Canada and Q Advisors.
Morrison & Co opted not to bid due to its acquisition of a 49 per cent stake in Telstra’s Australian tower portfolio with the Future Fund for $2.8bn.
Optus is owned by the Singtel, which is backed by the Singapore government holding company Temasek. The new joint venture partner will not only own the majority of its Australian tower portfolio but assist in the construction of new towers as well.
Singtel is looking to sell down its Optus towers to help fund the rollout of its 5G network.
On offer is a portfolio of between 2000 and 2500 Australian telecoms towers, and buyers are being offered the opportunity to own about 70 per cent of the portfolio, thought to be worth more than $2bn.
The understanding is that the portfolio on offer generates about $100m of earnings before interest, tax, depreciation and amortisation.
Initially, up to 30 parties showed interest.
TPG Telecom is said to be waiting for the outcome of the Optus auction before placing its own tower portfolio on the market on the back of the strong price Telstra achieved.
Analysts believe its portfolio of 1200 passive tower infrastructure assets could sell for between $1bn and $1.3bn.
New Zealand telecommunications company Spark has also signalled a potential sale of a stake in its portfolio of 1500 towers.
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