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Fibre sell-off continues in Spain

Fibre-optic networks are hot property in Spain, with yet another sale apparently attracting the attention of some big names in the investment world.

Spain’s electricity grid operator is looking to sell of almost half of its fibre-optic network business, according to reports in the local press. Red Electrica is looking to monetise its Reintel business, which operates a 50,000-km dark fibre network alongside the electricity grid and rail network in Spain.

According to Reuters, which cites Spanish business paper Expansion, the firm plans to auction a 49% stake in Reintel, and any deal could value the business at between €1.2 billion and €1.3 billion. The process has attracted the attention of at least half a dozen bidders, providing further evidence of the popularity of telecoms infrastructure assets among the investment community.

The most widely known are KKR, which already owns a number of fibre assets, including stakes in Telefonica’s recently spun-out fibre operations in Chile and Colombia; finance and insurance group Allianz, which partners with Telefonica on its German fibre operation Unsere Grüne Glasfaser and recently took a stake in American Tower’s European unit; and insurance firm Axa, which alongside Allianz Capital Partners and others owns a stake in France’s SFR FTTH.

Expansion also lists three other names: European asset management company Vauban (Natixis), Australia’s QIC and Dutch pension investor PGGM. The paper got the information from unnamed sources.

Given the current state of play in Spain’s fibre market, reports of such a network sale are hardly outlandish; everyone is looking to cash in on fibre assets.

On Monday, private equity firm EQT announced it has brokered a deal that will see it exit Spanish fibre operator Adamo five years after it bought a majority stake in the company. It did not divulge how much fellow PE outfit Ardian Infrastructure will pay for the company, presuming the deal ticks all the right regulatory boxes, but it too is looking set to be a pretty big deal. Spanish newspaper Cinco Dias puts it at in excess of €1 billion, with interest from Macquarie-backed Onvia having pushed up the price.

Meanwhile, there are reports that Telefonica, fresh from brokering various fibre monetisation and partnership deals across its footprint, is set to make a move at home. The Spanish incumbent is said to be holding talks with a view to selling off a portion of its domestic fibre network – it seems we’re looking at between 15% and 35% – and has lined up as many as 10 interested parties. The whole network is reportedly valued at around the €15 billion mark, so the telco could bring in a fair chunk of change from any transaction.

Reintel is small fry by comparison, but, like Adamo, it’s clearly big enough to attract the attention of investors. Assuming the story is accurate, it will be interesting to see what the final price tag looks like.

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