KKR has emerged as the favourite to acquire a stake in Vodafone’s towers business and could broker a deal very soon, if it gets its way, it emerged this week.

The private equity firm has teamed up with Global Infrastructure Partners in the race to buy into Vantage Towers, the passive infrastructure outfit spun out of Vodafone just under two years ago, and is now the front runner, Bloomberg reported, citing the usual unnamed sources familiar with the matter.

The pair are up against a joint bid from passive infrastructure specialist Cellnex and Singapore sovereign wealth fund GIC, the sources said. Big names in this space, like American Tower and EQT, have also expressed interest in Vantage Towers, the newswire added, but it now seems to be a two-horse race.

Bloomberg did not overtly comment on why KKR is out in front, but the answer is probably right there in its report: “Cellnex is seeking to buy a majority stake that would give it operational control, one of the people said.”

It’s likely that Vodafone is keen to retain operational control. Any deal will be a balancing act for the telco group; it will want to offload a big enough stake to bring in as much cash as possible, but probably without completely ceding control. Therefore, a private equity buyer like KKR, rather than an industry player like Cellnex, makes more sense.

That said, Cellnex must believe it has something to offer to have submitted a bid, so this is not entirely a foregone conclusion. Indeed, the sources noted that Vodafone has yet to pick a winner.

Vodafone, which holds around 81 percent of Vantage Towers following its flotation in 2021, accepted binding offers for the business last week and is currently evaluating its options.

At the time of its Frankfurt listing Vantage Towers had a market cap of just over €12 billion, but according to Bloomberg that figure stood at €14.3 billion on Thursday as news of the possible KKR deal broke. All of which gives us some idea of the billions of euros Vodafone could bring in from whatever deal it ends up agreeing.

We could know sooner rather than later. The newswire report suggests that Vodafone could be looking to hammer out an agreement by the time of its half-year results announcement on 15 November, and that KKR is aiming to sign on the dotted line as early as next week.

However, it cautions that KKR is keen to avoid a repeat of what happened in the contest for Deutsche Telekom’s towers, which drew to a close in mid-July.

As a quick reminder, the word on the street was that KKR was the front runner in that competition too, but ultimately the German incumbent inked a deal to sell a 51 percent stake in its GD Towers business to DigitalBridge and Brookfield, valuing the asset at €17.5 billion. While Deutsche Telekom retained a minority 49 percent holding in the unit, it also held onto certain rights that left it with a sufficiently position in the towers space.

Vodafone could well be looking for a similar outcome. And it’s worth noting that DigitalBridge and Brookfield were initially backing Cellnex in the Deutsche Telekom towers competition, swooping in once the infrastructure firm had pulled out, having been unable to reconcile its desire for control with the telco’s preference for an investment partner.

This juggling act is currently occupying the powers that be at Vodafone, and its doubtless not an easy decision to make, nor a straightforward transaction to draft. But with just two bidders left in the contest, one of which is a clear favourite – presuming Bloomberg’s sources are correct – a deal could well come soon.

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