Spark is looking to sell a stake of "up to 70 per cent" of its celltower network in an auction run by Jarden and Forsyth Barr, according to an AFR report.
The telco has confirmed it has retained the two investment banks for a possible partial sale, but has yetto make any public comment on the size of the stake up for grabs.
Meanwhile, Vodafone NZ (half-owned by NZX-Infratil, half by Canada's Brookfield) is said to have asked for indicative bids for the sale of 80 per cent of its celltower network.
A Vodafone NZ spokesman declined comment.
Both telcos are said to value their celltower networks at more than $1 billion - a conservative estimate, relative to similar deals across the Tasman.
That means Spark should see proceeds of $700 million-plus from its partial celltower sale (well above its book value of $100m), and Vodafone NZ some $800 million-plus.
AFR says it has sighted a flyer sent to possible bidders, which says a shortlist of potential buyers will go to a second-round auction, with binding bids due in August.
Vodafone NZ earlier said that 1500 celltowers would be up for grabs with a possible sale. The number excludes rural celltowers jointly operated with Spark and 2degrees. The telco has previously said it estimates a Vodafone NZ "TowerCo" would have operating earnings of $51 million in 2023.
Spark also has previously said it has 1500 celltowers, and that 1263 would be on the block in a possible deal once jointly-owned rural towers were excluded. The telco earlier said a Spark "TowerCo" would be on track for operating profit of about $35m in 2023 "with a strong growth profile over the next 10 years".
Vodafone NZ earlier said it had appointed Barrenjoey and UBS to run its possible sale.
Infrastructure investor John Laing (owned by US private equity giant KKR), the Ontario Teachers' Pension Plan, Australia's Infrastructure Capital Group and US companies DigitalBridge and American Tower are said to be among the potential buyers.
Both Spark and Vodafone NZ are looking at a deal involving their passive cell tower assets - the towers themselves, plus freehold land or rights to the ground, lamp posts or rooftops that mobile sites sit on - while retaining control of the electronics, and intangibles like spectrum.
Both will enter long-term lease-back arrangements from the buyers.
And in both cases, cell towers built by the Rural Connectivity Group (a joint venture between Spark, Vodafone and 2degrees). are excluded from the deal.
On a February 23 earnings call, Spark CFO Stefan Knight said Spark's celltower network had a book value of around $100m.
Asked if a TowerCo IPO was on the table, he replied, "That's not our focus at the moment. The focus is [on] running a process more akin to what we've seen in Australian markets and other markets."
Those Australian deals proved lucrative, which in part explains the sudden "TowerCo" enthusiasm on this side of the Tasman.
Photo / File
In October 2021, Optus sold a 70 per cent stake of its fully owned cell tower subsidiary to AustralianSuper (the new co-owner of Vocus) in a A$1.9b deal that valued the 2312-site network at A$2.3b.
in June last year, Telstra sold 49 per cent of its telecommunications towers business, InfraCo Towers - which has about 5570 sites - to a consortium for A$2.8b. The consortium was led by Morrison & Co, which manages Vodafone NZ half-owner Infratil.
But for the Telstra tower deal, Morrison was representing a group of Australian super funds.
Spark chief executive Jolie Hodson said on the February earnings call, "Should we introduce that third-party capital, we intend to retain a shareholding and will be a key anchor tenant with appropriate agreements in place on arm's length terms for operations and services. There will be no change for our customers. And we'll continue to invest in modernising our mobile network and improving coverage."
2degrees has been keeping a watching brief as its merger with Orcon Group progresses.
The deal is set to be finalised on June 1 after clearing its final approval hurdle.
