Vodafone Unit Vantage Tightens Price Range for Frankfurt IPO
A Vodafone Group Plc logo on a telecommunications mast in Berlin. (Photographer: Liesa Johannssen-Koppitz/Bloomberg)

Vodafone Unit Vantage Tightens Price Range for Frankfurt IPO

Vodafone Group Plc’s mobile-phone towers unit narrowed the price range for its 2 billion-euro ($2.4 billion) initial public offering in the lower half of its original target, according to terms seen by Bloomberg News.

Most large listings in Europe this year have priced at the top end of their ranges, including offerings by Polish parcel locker provider InPost SA, German online car dealer Auto1 Group SE and the London IPOs of virtual greeting-card company Moonpig Group Plc and Russian discount retailer Fix Price Group Ltd.

Vantage Towers AG revised the range for the Frankfurt sale to 24 euros to 25 euros a share from the original 22.50 euros to 29 euros, deal terms showed.

“Listing mobile network operator-captive tower assets in Europe has always been a challenge, so Vantage’s valuation even at the lower part of the range could be seen as a success,” said Patrick Basiewicz, an analyst at U.K. broker finnCap.

Analysts have said Vantage may initially trade at a discount to the heady earnings multiples enjoyed by “neutral” tower companies like Cellnex Telecom SA, which rents tower space to mobile operators. Vantage Towers will do the same, but Vodafone, which competes with the new company’s potential customers, will retain a controlling stake.

The tightened valuation range “does offer value to potential investors,” analysts at Canaccord Genuity’s research division Quest wrote in note, adding that there is “modest upside in this IPO.” The analysts valued Vantage Towers at 30.50 euros per share. “Management has much to prove to investors, particularly with regard to M&A, but this is a well-trodden path in the tower industry,” they said.

There is enough investor demand to cover the deal within the narrowed price range, as well as throughout the original interval, according to the deal terms. Vantage is set to make its debut on the Frankfurt Stock Exchange on Thursday.

Vodafone is targeting maximum proceeds of 2.8 billion euros from the offering, which would include an option to increase the deal size and an over-allotment. The final number of shares sold will depend on where the IPO prices.

Vantage’s listing comes amid a global surge in equity capital markets as the economy rebounds from the coronavirus pandemic thanks to ultra-low interest rates, government stimulus and the arrival of vaccines.

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