Virgin Media O2 moves to sell stake in towerco Cornerstone


The sale of half the company’s stake in the mobile tower business could raise up to £750 million, with the company suggesting they could sell their full stake if the right offer were to be made

This week, reports suggest that Virgin Media O2 (VMO2) has initiated the process to sell at least half of its stake in Cornerstone, the infrastructure firm that owns and manages the operator’s mobile towers in the UK.

According to The Financial Times, VMO2 has appointed Goldman Sachs and JPMorgan to oversee the sale, with potential suitors having already been informed of the details.

Cornerstone operates the largest mobile infrastructure network in the UK, comprising over 20,000 sites, including towers, rooftops, small cells, and other deployments. In total, the infrastructure business is estimated to be worth up to £3 billion.

VMO2 owns a 50% stake in Cornerstone, with the other half is owned by Vantage Towers, the towerco spun off by Vodafone back in 2020.

As such, VMO2’s sale of half its stake (25% of the business overall) could net the company somewhere around £750 million.

According to reports, VMO2 would also consider the sale of its entire stake if an attractive offer were to be made.

That VMO2 is looking to monetise its passive infrastructure should come as little surprise. Faced with the expensive task of rolling out fibre and 5G at a blistering pace, in recent years numerous operators, including Vodafone, Telefonica, and Deutsche Telekom, have moved to spin off and sell their mobile tower units in exchange for quick cash.

Investors, meanwhile, continue to see these assets as a valuable and reliable long-term investment, with towers being snapped up not only by infrastructure giants like Cellnex and American Tower Company but also by private equity funds.

Indeed, over the past year alone we have seen a number of major tower deals in Europe. Last summer, for example, Deutsche Telekom agreed to sell a majority stake in its tower unit to Brookfield Asset Management and private equity group DigitalBridge Group.

Just a few months later, Vodafone Group followed suit by agreeing to sell its 82% stake in Vantage Towers to a consortium comprising KKR, Global Infrastructure Partners, and Saudi Arabia’s Public Investment Fund.

Exactly what VMO2 will use the proceeds from a potential sale for is currently unclear, but the operator certainly has no shortage of capex-intensive plans for the next few years. The company is currently aiming to upgrade its hybrid fibre coax network to fibre-to-the-premises (FTTP) by 2028, as well as having recently formed a joint venture with InfraVia called Nexfibre, which aims to pass five million homes with FTTP by 2026.

All of this fibre deployment does not come cheap, and any additional liquidity will surely go a long way towards making these goals more attainable.

However, there is another potential motivation for raising these funds now. Last month, the company was also linked to a potential takeover of its UK fibre rival CityFibre, a deal that would carry with it a price tag of around £3 billion.

Such a deal – if ultimately permitted by various regulatory bodies – would represent a major shakeup for the UK’s fibre landscape, reducing the country to just two nationwide networks.

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