Vodafone is veering away from the City, and is instead eyeing up Frankfurt for the listing of its multi-billion-pound European towers business, in a move that will further position the firm away from Britain.
The telecoms firm last week invited advisers to pitch for a role on the planned flotation of its European tower units, set for early next year. The FTSE 100 group is seeking a valuation of between €10bn (£9.2bn) and €20bn, and the listing could raise more than €2bn, according to people familiar with the matter.
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The towers business, Towerco, forms a legally separate organisation within Vodafone, boasting almost 62,000 masts across 10 countries. Vodafone predicts it will likely bring in annual revenue of roughly €1.7bn, with proportionate Ebitda of around €900m.
In May, Vodafone chief executive Nick Read said London and Frankfurt are both strong contenders for a listing venue.
However, Vodafone is now leaning towards Frankfurt as a listing venue, according to a Bloomberg report. Deliberations are thought to be at an early stage, and no final decisions have been made.
The move would mark a further blow for the telecoms firm’s presence in Britain, as Vodafone continues to pivot towards Europe for its central operations.
Vodafone is headquartered in Paddington, London, however its new towers unit has significant operations in Germany, and is set to be headquartered in Dusseldorf.
Read last year said Germany was the “heart of the company”, marking 40 per cent of free cash flow, but that “London remains a good place to have a global headquarters”.
But the move casts fresh doubt on whether Vodafone will retain the City as its global base, as the UK edges towards the Brexit deadline. Read added: “Obviously, with Brexit I hope that remains the case.”
Towers have become a vital trading asset for cash-strapped European telecoms firms in Europe, with companies such as BT, Telefonica, Iliad, and Sunrise selling masts.
Vodafone’s decision to spin off its towers business comes as the company attempts to ease its €42.2bn debt pile. The telecoms company claims the Towerco business will create Europe’s largest towers portfolio.
Shares remained largely flat on the news at 125.7p at 12pm.
Vodafone was approached for comment.