Arqiva shuns private sale in favour of raising £1.5bn from London float

 
Oliver Gill
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Arqiva's owners explored the possibility of both a private sale and stock market float (Source: Arqiva)

Arqiva, the firm that owns the majority of Britain's UK TV and radio masts, today revealed plans to raise £1.5bn through a London stock market float.

The announcement comes after an attempt at a private sale fell apart on Friday.

The listing would be the City's largest of 2017.

Owned by Canadian Pension Plan Investment Board, Macquarie and a handful of smaller Australian institutional investors, Arqiva had been pursuing a twin-track sale process for much of 2017.

City sources declined to comment on the name of the final interested party, which had its final offer rejected by Arqiva's owners at the end of last week.

Read more: Could cash rich Arqiva entice new suitors?

It was reported in September that the final interested private party Singapore sovereign wealth fund GIC was concerned following reports of declining UK TV audiences.

The stock market float will require a significant restructuring of Arqiva mammoth £5.7bn debt pile. The owners have £2.6bn of shareholder loans and rolled up interest that will be converted into equity. A further £600m of corporate bonds will be redeemed and Arqiva wants to break free from around £1bn of derivative contracts.

The current owners have poured £1.8bn of capital into the firm and are yet to take a penny out, sources said.

Ditching its "Plan A" of a private sale means Arqiva joins a number of other parties seeking to float in London.

Ready meals supplier Bakkavor, business services firm TMF and credit services provider Cabot Credit Management are among the other companies planning to list in London.

However, going public may also be at odds with the strategy of some Arqiva's top executives, who are keen to put Arqiva at the forefront of the development and roll out new technologies such as 5G. Such plans would likely be more capital intensive and require additional investment, eating into the initial returns of cash-hungry stock market investors.

Read more: Arqiva picks banks in £6bn float plans

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