Cellnex Telecom has pulled out of the race to acquire a stake in Deutsche Telekom’s towers portfolio, leaving the way open for KKR to ink a deal.

Six weeks ago the Spain-based passive infrastructure specialist confirmed media reports that it was involved in the preliminary phase of Deutsche Telekom’s towers sale. Back then it was one of a number of parties lining up for a piece of the action, but possible buyers appear to have now dwindled to just one.

Cellnex was reportedly working with Canada’s Brookfield Asset Management on a bid for a stake in the German incumbent’s towers business, although it never commented on the identity of any partners. A fortnight ago Reuters claimed that Cellnex was willing to throw in a stake in itself as part of a deal valued at €18 billion. Cellnex would take control of the towers unit, known as Deutsche Funkturm, leaving Deutsche Telekom with a minority stake, the newswire’s sources said.

Meanwhile, there have been many other names floated as possible buyers, most notably Vodafone, via its Vantage Towers operation. Vodafone was characteristically coy on the matter, confirming that it is still on the lookout for potential partners, but saying nothing more. An anonymous source told Reuters it had pulled out though.

All of which seems to leave just KKR, which is backed by US investors Global Infrastructure Partners and Stonepeak. As an aside, Stonepeak this week agreed to plough US$2.5 billion into American Tower’s US data centres business in return for a stake of around 29%. There are certainly some deep-pocketed investors circling the infrastructure space at present.

The KKR-led grouping has tabled an offer that would allow Deutsche Telekom to keep control of its towers while giving the investor some governance rights, again according to Reuters, which also puts that bid at around the €18 billion mark.

Based on Deutsche’s Telekom’s public comments about its plans for its towers business – which have been scant at best – that seems to make more sense than a sale to a towers company like Cellnex or Vantage Towers, which would be looking for operational involvement.

There have long been question marks over the nature of Deutsche Telekom’s plans for the towers business. All we really know for sure is that it is keen to retain some sort of position in that side of its operations, while at the same time making some money. The telco sees the potential of the towers market and wants a piece of it, which makes KKR a more likely bet than most of the other names that have been bandied about over the past… well, there has been speculation over the future of Deutsche Funkturm for years, but talk of a deal has emerged over the past six months or so.

The Deutsche Funkturm business would have been a great fit for Cellnex, which boasts a portfolio of 137,000 towers – including the CK Hutchison deal the in the UK that has yet to close, and towers in the pipeline – across a dozen European markets, excluding Germany. The bulk of Deutsche Funkturm’s 40,600 towers are in its home market, with some in neighbouring Austria. A deal there would have been a big boost for Cellnex.

But it is not to be.

“Cellnex reports that it is no longer participating in the process for the potential acquisition of a stake in the company that operates Deutsche Telekom’s telecommunications infrastructure in Germany and Austria,” the company said in a short filing to the Spanish securities regulator on Wednesday.

We can speculate on why; there’s a good chance its expectations of control did not align with Deutsche Telekom’s. The KKR deal, if and when it comes, might give further clues. The industry has been expecting a decision in the next month, before Deutsche Telekom’s Q2 results presentation on 11 August. But the newswires are now talking about an imminent announcement. Let’s see.

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