Cellnex reportedly offers part of its business to DT in exchange for towers

According to Reuters, infrastructure firm Cellnex has offered German operator Deutsche Telekom a stake in its business as a further incentive to sell it its tower division.

Sources told Reuters Cellnex has offered DT a stake in its business as part of a as recently submitted €18 billion binding offer to to take control of the German operator’s towers unit – DFMG –  which is backed by Canada’s Brookfield Asset Management, and would also allow it to retain a piece of DMFG.

The size of the slice DT is being offered is implied to be ‘less than 10%’ – and obviously the huge amount of monetary difference between 1% and 10% of a firm like Cellnex. Reuter’s network of gossips say this is a move to counter another offer from a consortium led by KKR, which would allow DT to retain actual control of its towers, though not entirely, as it would have to ‘compromise on key strategic decisions’.

Another source ‘familiar with Vodafone’s strategy’ fluttered to Reuter’s window and whispered in its ear that the operator, who also fancied DT’s towers, has dropped out of the auction after initially seeking to combine of its own towers business, Vantage Towers, with DFMG.

The sources also said that DT is going to make its mind up whose diamond ring it will slip onto its corporate finger before its Q2 results on August 11th.

In May more anonymous sources revealed to Bloomberg that Brookfield Asset Management and Cellnex Telecom were in talks about going in on a joint bid for DT’s towers and that Brookfield could also swoop for the towers on its own, while other private equity and infrastructure funds – such as Stonepeak and DigitalBridge Group – were ‘studying offers for either a minority or controlling stake in Deutsche Telekom’s towers unit’.

It was first reported in April that DT was considering selling off the towers. A report from Reuters claimed it was reviewing proposals to sell a majority or minority stake in it, and that various firms had submitted bids to buy either 51% or take a minority interest. The sources said that while CEO Tim Hoettges has signalled he wants to ‘de-consolidate’ the business, it could still favour a minority stake sale to a financial investor, with one source saying: “They still need to decide what’s best to do as a first step. A minority stake sale remains an attractive option given the complications of pursuing an industry tie-up.”

All in all there are a lot of bids and a lot of sources flying around. We’ll find out what comes out of it all by August 11th apparently.

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