Robust Demand for Vintage Towers IPO
In what is likely to be the largest European IPO so far, Vodafone set the flotation price range for Vantage Towers at €22.50 ($26.75) to €29.00 ($34.45) per share on the Frankfurt Stock Exchange, taking the unit’s market capitalization up to €14.7 billion ($17.5). The company
will use the proceeds to pay off some of its debt.
While the base offer size stands at €2 billion ($2.38 billion), Vodafone can opt to increase the offer up to €2.8 billion ($3.33 billion) via an “upsize” option and an overallotment option for head managers on the IPO.
According to the bookrunners, the demand was robust from the first day as there were enough orders to cover the basic offering. The valuation of Vantage Towers has made its IPO the biggest in Europe this year, followed by IPOs of Polish ecommerce company InPost, German used-car trading business platform AUTO1, and the UK footwear company Dr. Martens.
Investment funds Digital Colony and RRJ are set to purchase €500 million ($594.2 million) and €450 million ($543 million), respectively, of Vantage stock. The IPO will run through March 17 with new shares to begin trading the next day.
James Ratzer, an analyst at New Street Research, said the involvement of cornerstone investors makes the rest of Vantage stock more scarce and could help drive the pricing of its IPO into the upper half of the price range.
The returns from the IPO will accrue to the British telecom giant and leave Vantage Towers with a free float of 19.1% from the base offering, which could increase to 24.6% if the offer is increased.
Vodafone and the rival telecom companies in Europe are attempting to take advantage of their tower and fiber assets after facing various challenges related to the coronavirus pandemic, regulations, and the rising competition. Furthermore, the rush to launch the 5G networks is also pushing the demand up for larger tower capacity.
British telecom company Vodafone Group is seeking to raise up to €2.8 billion ($3.33 billion) by floating its masts unit Vantage Towers in the biggest European IPO so far in 2021.