GIC leads bidding for stake in Spanish broadband joint venture: sources
GIC and the joint venture owners are negotiating details of a potential agreement for a 20 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 euros (S$8.9 billion) to 7 billion euros 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, saying it had an estimated enterprise value of 8 billion euros to 10 billion euros. They have said they would look for an investor to buy 40 per cent.
Spain has one of Europe's largest fibre 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 fibre 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 and Providence Equity Partners- and MasOrange's chief executive officer, as well as others.
Spokespeople for Orange, GIC, Cinven, Zegona and MasOrange declined to comment, while representatives for KKR and Providence did not respond to requests for comment. BLOOMBERG
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