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KKR, GIP Pursue Stake in Vodafone’s $13 Billion Towers Arm

(Bloomberg) -- KKR & Co. and Global Infrastructure Partners are among private equity firms competing for a stake in Vodafone Group Plc’s wireless towers unit, people familiar with the matter said.

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Swedish investment firm EQT AB has also been exploring a potential investment in Frankfurt-listed Vantage Towers AG, the people said, asking not to be identified discussing confidential information. Vodafone has invited suitors to participate in an auction process, according to the people.

Shares in Vantage rose as much as 4.2% on Thursday, giving the company a market value of 13.4 billion euros ($13.4 billion).

Vodafone hasn’t made a final decision on the size of the stake it wants to sell, though a number of bidders are keen to get a majority holding, the people said. The UK carrier currently holds around 82% of Vantage, according to data compiled by Bloomberg.

There’s no certainty the private equity firms will proceed with formal offers, and other bidders could still emerge, the people said. Representatives for EQT, KKR, Vantage and Vodafone declined to comment, while a spokesperson for GIP didn’t immediately provide comment.

Europe’s phone carriers have started to sell off infrastructure assets to raise money for investments in costly fiber-optic rollouts and wireless network upgrades, as well as to cut their large debt piles. In July, Deutsche Telekom AG agreed to sell a majority stake in its towers unit to Brookfield Asset Management Inc. and DigitalBridge Group Inc. in a deal valuing the business at 17.5 billion euros.

These assets, which carriers once saw as vital to their business models, are attractive to investment firms thanks to their steady, predictable returns. KKR raised $17 billion for its latest global infrastructure fund earlier this year, and Bloomberg News reported in February that GIP was targeting $25 billion for the world’s biggest pool of capital dedicated to infrastructure investments.

(Updates shares in fourth paragraph.)

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