Prospective buyers of Singtel’s $2bn Optus’ mobile towers have started sizing up the portfolio of assets that are expected to shortly come up for sale and so far, Axicom, Morrison and the Future Fund are understood to be among the potential buyers.
DataRoom can also reveal that international strategic player American Tower is also set to line up, while the typical private equity names, including Kohlberg Kravis Roberts, TPG Capital and The Carlyle Group will all initially be in the mix.
American Tower Corporation is an American real estate investment trust and an owner and operator of wireless and broadcast communications infrastructure in several countries worldwide and is headquartered in Boston.
Other international groups are also expected to take a look.
This column understands that the Future Fund, with $168bn of assets under management, is teaming up with Morrison & Co as part of its effort to acquire the assets, while Axicom has tapped Credit Suisse and Macquarie Capital as its advisers.
The towers were expected to hit the market this month through Bank of America, but that could now be delayed as Victoria continues to wrestle with strict lockdown measures to curb the spread of the coronavirus and due to the timely process of separating the assets, which requires approval from the Foreign Investment Review Board.
Parties are still to learn of the exact nature of the offering, with the understanding that a 70 per cent interest in the portfolio could be placed on the block, rather than the assets in their entirety.
The logic is that by Singtel’s Optus holding a stake, it would create an alignment of interest between the customer and owner of the infrastructure.
Still, detailed work on the assets is believed to be well underway.
A similar situation exists with AGL Energy and its renewable energy fund, where it is a 20 per cent investor and also underwrites the power purchase agreements.
It is also expected that options to develop further telecommunication towers will be pitched as a major attraction for suitors.
Axicom, the former Crown Castle operation, remains the favourite to win the competition, providing the Australian Competition & Consumer Commission has no objections.
Crown Castle was purchased in 2015 for $2bn by a consortium led by Macquarie Infrastructure and Real Assets.
The buyer of the Optus towers would see long-term agreements in place as to what they are signing up to and plenty of transparency will exist around pricing.
Investment bank UBS is a logical choice for the Morrison and Future Fund consortium when it comes to selecting an adviser, given that UBS advised the Future Fund on its purchase of the Canberra data centres and Morrison when the Crown Castle towers were up for sale.
The proceeds from a sale are expected to be used to fund the roll out of 5G infrastructure.
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