Infra funds circle complex TDF sale

15 February 2019 - 12:00 am UTC

Information memoranda for the sale of a majority stake in French telecoms giant TDF are scheduled to be released this month, with the sale enterprise value expected to be up to EUR 7.1bn, sources said.

Antin Infrastructure Partners is believed to be considering bidding, two sources said. Another expected bidder is Spanish telecommunications business Cellnex, which is partly-owned by The Abu Dhabi Investment Authority and Singapore’s sovereign wealth fund GIC, as reported. Brookfield (45%) and PSP Investments (22.5%) are believed to be selling their stakes in the business.

KKR Infrastructure has decided not to bid, according to a well-placed source, while Ardian Infrastructure will not bid, it is understood. Both KKR and Ardian were believed to be considering bidding last month.

Buy-side advisers have yet to receive teasers, although the sellers are planning to release IMs in the coming weeks, it is believed.

TDF operates 13,900 telecommunications tower sites, fibre-optic broadband and provides television and radio broadcasting services. The Paris-headquartered telecommunications business could fetch a multiple of between 15-20 times of pre-adjusted 2017 EBITDA of EUR 355m, as reported. 

The multiple for the business’s towers and fibre is expected to be slightly higher than the 18x paid by KKR for a 49.9% stake in Altice’s French telecoms towers business SFR TowerCo, given that the SFR sale involved a minority stake. 

However, TDF’s broadcasting services are considered riskier than the towers and fibre section and are likely to reduce its overall price, said a source. TDF’s broadcasting services revenues declined 6.2% in 2017 to EUR 289.2m, while its revenues from hosting network operators on its telecommunication sites rose 7.4% to EUR 290m.

TDF said that revenues from its towers were buoyed by government policy that enhanced mobile coverage and the award of a 25-year contract with French state-owned railway company SNCF to operate mobile coverage sites in around 3,000 trains. 

However, TV and radio broadcasting services revenues fell because of the switching off of two digital terrestrial television distribution sites in preparation for the modernisation of the business’s broadcasting services, including as the rollout of ultra-high definition television. 

TDF recorded EUR 676m in consolidated sales from its 2,300 clients in 2017, which were split between telecommunications (47%), television, (26%) and radio (17%) services.   

Brookfield, PSP Investments and APG acquired TDF for EUR 3.56bn from Ardian, TPG, Charterhouse and French state-owned investment entity Bpifrance in April 2015. 

PSP (22.5%) and APG (22.5%) own their stakes through London-headquartered Arcus Infrastructure managed accounts Arcus Tivana Investor vehicles one and two. 

Crédit Agricole Assurance’s Predica Infrastructure subsequently acquired a 10% stake from APG in the business for around EUR 215m in May 2015.

Morgan Stanley and BNP Paribas are the sell-side advisers.

Antin Infrastructure Partners did not respond to comment by press time. KKR Infrastructure, Brookfield and PSP Investments declined to comment. 


Read more