Price rises for Arqiva as suitors circle

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The price for the British telecom tower and broadcasting network infrastructure company Arqiva is believed to have escalated in the face of strong interest from a wide range of major international investors.

Arqiva has been put up for sale by its owners, a consortium of the Canadian Pension Plan Investment Board (CPPIB) earlier in the year in a process being overseen by NM Rothschild. Initial consideration was also given to a flotation, but it is believed that many institutional investors baulked at the £3bn of debt on Arqiva’s balance sheet.

However Arqiva is seen by some to be a vital part of the UK’s infrastructure. It owns 8,000 cellular towers across the country as well as more than 1,100 TV transmission sites and 1,500 radio transmission points. Investors believe that it has the potential to be a major beneficiary of the next generation of telecoms technology, which will lead to an enormous increase in the demand for bandwidth.

Initial suggestions talked about a price of around £5bn for Arqiva, which generated EBITDA of £428m on revenues of £884m in its last annual results, but sources now talk of the likely price having risen to £6bn.

It is believed that the huge Canadian pension fund PSP Investments is the latest company to have made a competitive bid for the assets, but it is said that it is competing against Brookfield, Cheung Kong and American Tower among others. The final round of the auction is still expected to take some time. Previous comment has also mentioned the acquisitive Spanish telecoms group Cellnex as a possible buyer, and suggested that a number of sovereign wealth funds could be interested, but they have not been mentioned in the most recent reports.

Investors note that PSP also made an attempt to buy Macquarie’s 25% stake in Arqiva in 2013, but these talks came to nothing.

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