Challenger broadband firm Cityfibre is preparing the sale of a major stake to a new investor in a deal said to be worth hundreds of millions of pounds
The London-based company has tapped bankers at UBS and Rothschild to identify a third backer, Sky News reported.
The buyer would join the two existing investors West Street Infrastructure Fund, which is backed by Goldman Sachs, and Antin Infrastructure Fund.
According to the report, Cityfibre is aiming to sell a significant minority stake that could potentially be worth hundreds of millions of pounds.
The cash injection would help to fund the company’s £4bn full-fibre broadband rollout programme, which aims to reach 8m premises across the UK by 2025.
A Cityfibre spokesperson said: “We can confirm that we’re exploring a possible expansion of our shareholder base to support the acceleration of our build and possible participation in the BDUK [Building Digital UK] rural programme.”
The sale process is set to start this week and is expected to take several months to complete.
Cityfibre, which bought Talktalk’s infrastructure arm in a £200m deal last year, is one of a number of firms racing to meet the UK’s target of bringing full-fibre broadband to the majority of the UK by the middle of the decade.
The programme is being led by BT’s Openreach, while Virgin Media is also competing to build new connections ahead of its planned merger with O2. Other challenger firms include Hyperoptic and Gigaclear.
An industry source told City A.M. Cityfibre was “building at pace due to the favourable regulatory environment developed by Ofcom for competitive infrastructure investment”.
Cityfibre, which last year announced it was hiring a further 10,000 people to help support its broadband rollout, is building its network in more than 60 towns and cities across the UK with more than half a million homes ready for services.
In addition to its deal with Talktalk, it has inked deals with telco partners such as Vodafone and Zen Internet to deliver services over its network.