GIC leads bidding for stake in Spanish broadband joint venture, sources say
GIC and the joint venture owners are negotiating details of a potential agreement for a 20 per cent to 30 per cent stake, according to sources.
LONDON – Singapore sovereign wealth fund GIC has emerged as the leading bidder for a significant minority stake in a fiber-optic broadband network venture owned by MasOrange SL and Zegona Communications, people familiar with the matter said.
GIC and the joint venture owners are negotiating details of a potential agreement for a 20 per cent to 30 per cent stake, according to the people. A deal could value the business, which comprises over 12 million premises, at about €6 billion to €7 billion (S$9 billion to S$10.5 billion) including debt, they said.
While talks are advanced, they could still be delayed or even fall apart, the people said, asking not to be identified as the information is private.
Zegona-owned Vodafone Spain and MasOrange announced the creation of the venture in January, with an estimated enterprise value of €8 billion to €10 billion. They have said they would look for an investor to buy 40 per cent. Orange chief financial officer Laurent Martinez said on a media call this week that they are confident the deal could be closed by the end of 2025.
Spain has one of Europe's largest fiber optic broadband networks, but widespread overlap between operators has led to fierce competition. Investors, such as pension funds and private equity firms, have been attracted to fiber in recent years given stable returns and low expenses once networks are deployed.
MasOrange is the result of the merger between Masmovil Ibercom and the Spanish operations of Orange. Orange has a 50 per cent stake with the remainder controlled by three investment funds–Cinven, KKR & Co. and Providence Equity Partners– and MasOrange's chief executive officer, as well as others.
Spokespeople for Orange, GIC, Cinven, Zegona, MasOrange and KKR declined to comment, while a representative for Providence didn't respond to requests for comment. BLOOMBERG
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