Vodafone Vantage Towers IPO preview: listing set to raise €2.8 billion with 88.9 million shares

• Vantage Towers to launch an initial public offering (IPO) on 18 March 2021, taking advantage of current market position
• The Vodafone subsidiary is expected to raise €2.8 billion
• Price guidance for shares is €22.50 - €29.00
• CEO confident float will be a success
• Trade an IPO - before or after the listing - with an IG account

Vantage Towers IPO: the basics

Vodafone (VODI.DE) announced its desire to list Vantage Towers on 24 July 2020. The announcement came on the same day the telecommunications company merged its Greek tower assets with Wind Hellas. That merger created what Vodafone called 'Europe’s leading tower infrastructure platform.'

An IPO was earmarked for early 2021 and a senior management team was put in place. Vivek Badrinath was named as chief executive officer (CEO) alongside Thomas Reisten chief financial officer (CFO) and Sonia Hernandez chief commercial officer (CCO). Vodafone’s decision to spin off its tower assets was based on its position in ten European markets, including Germany, Italy, Spain, Greece and the UK.

Vantage Towers controls more than 82,000 macro sites across Europe. It has a 33.2% equity stake in Infrastrutture Wireless Italiane S.p.A (INWT.MI). Additionally, there is an option in the IPO to include a 50% stake in the UK’s Cornerstone Telecommunications Infrastructure Limited.

Vantage Towers share price expectations

To reflect its market position, Vantage Towers issued price guidance of between €22.50 and €29.00 per share on 9 March 2021. Following the launch of the Vantage Towers IPO, the company signalled its intention to commence trading on the Frankfurt Stock Exchange on or around 18 March 2021.

Vantage Towers was created as a response to the ongoing digitisation of Europe. With 68,000 tower sites and an additional 14,000 subsidiaries, it stands as Europe’s second largest mobile communications network. Vodafone’s decision to commercialise its infrastructure by forming a spinoff company will allow it to licence out the use of these towers to other carriers.

Through its portfolio of towers, masts, rooftop sites, distributed antenna systems (DAS) and small cells, Vantage Towers will capitalise on the increased demand for mobile data. The plan is to offer greater connectivity across 5G networks, become a key player in the development of the Internet of Things (IoT) and obtain more value from its existing infrastructure of towers at a critical time.

With increased competition, tighter regulations and Covid-19 squeezing margins, the IPO is a restructuring effort designed to help Vodafone’s balance sheet. As stated by Vodafone executives, some of the money raised through the Vantage Towers IPO will be used to pay down existing debt.

Vodafone aims to attract an initial investment of €2 billion through the sale of 88,888,889 shares. An additional 22,222,222 shares may be made available in agreement with Joint Global Co-Ordinators (BofA Securities, Morgan Stanley and UBS) to raise a further €500 million. Finally, 13,333,333 shares worth €300 million have been made available to cover possible over-allotments. This takes the total amount of funds to €2.8 billion.

How much is Vantage Towers worth?

Through its current resources, demand for mobile data and the fact wireless carriers need access to more towers, Vantage Towers expects revenue for 2021 to be between €955 million and €970 million. Earnings before interest, taxes, depreciation and amortisation (EBITDA) is projected to be €530 million - €540 million and RLFCF €375 million - €385 million. In light of these projections, the price guidance for shares in Vantage Towers is between €22.50 and €29.00. Moreover, the IPO values Vantage Towers at €14.7 billion.

Digital Colony and RRJ have become cornerstone investors for the Vantage Towers IPO. The former agreed to buy €500 million worth of shares, while the latter has invested €450 million. Commenting on the IPO, Vantage Towers’ CEO Badrinath said there is a lot of interest ahead of the listing.

'The Vantage Towers IPO is moving ahead at pace. Demand for data and connectivity across Europe is powering growth in the towers sector. Our superior grid and leading market positions mean we are well placed to benefit from this growth and our recent financial results highlighted the good commercial and operational momentum across the business' Badrinath commented.

Fundamentals at a glance

• Founded in 2020 as a spinoff of Vodafone
• Vantage Towers controls 82,000 macro sites, including towers, masts and DAS
• It is currently the number one or two tower company in ten European countries, including Germany, Italy, Spain, Greece and the UK
• Projected revenue for 2021 is expected to be up to €970 million
• The company’s primary focus will be on providing carriers with more connectivity across one of the largest tower networks in Europe

How to trade in the Vantage Towers IPO

As soon as Vantage Towers publicly lists you will be able to trade in the company through IG’s world-class trading platform.

You will be able to do this through derivatives trading. Derivatives trading – CFD trading – will allow you to trade on the price of shares rising and falling, without owning the underlying asset.

To trade in Vantage Towers shares, once the company lists, follow these steps:

1. Learn more about the Vantage IPO
2. Decide to trade with CFDs
3. Create an IG account
4. Open and monitor your position

Find out everything you need to know about trading the Vantage Towers IPO

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• What is an IPO?
• How to take a position before, during and after an IPO
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