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KKR said to woo sovereign funds for Indus Indus Towers deal

LiveMint logoLiveMint 31-03-2017 George Smith Alexander

Mumbai/ London/ Toronto: A consortium led by KKR & Co. has approached sovereign funds about joining a potential deal to take over Indus Towers Ltd., which could value India’s largest wireless infrastructure company at more than $12 billion, people with knowledge of the matter said.

KKR and Canada Pension Plan Investment Board are weighing a two-part transaction that would see them gain control of Indus Towers, according to the people, who asked not to be identified because the information is private. The investors are seeking financial partners to participate in the deal and have reached out to sovereign funds including Abu Dhabi Investment Authority and Norway’s wealth fund, the people said.

Under the plan being considered, the investor group would first boost its stake in Bharti Infratel Ltd, which owns 42% of Indus Towers, according to the people. After the consortium gains greater control of Bharti Infratel, it would then use the Mumbai-listed tower company to make an offer for the combined 53% Indus Towers stake owned by Vodafone Group Plc and Idea Cellular Ltd., the people said.

The KKR consortium could face competition from Canadian alternative asset manager Brookfield Asset Management Inc., which also plans to consider an offer for a controlling stake in Indus Towers once a formal sale process begins, the people said.

Deliberations are at an early stage, and the structure of the potential deal could change, the people said.

A combination with Bharti Infratel, which has a market value of $9.3 billion, would solidify Indus Towers’s position as the number one owner of wireless infrastructure in India.

KKR would join American Tower Corp. and Brookfield, which have spent billions of dollars on towers in one of the world’s most competitive telecommunications markets.

KKR and CPPIB bought a 10.3% stake in Bharti Infratel this month for Rs6190 crore ($954 million), according to stock exchange filings.

Representatives for ADIA, Bharti Group, Brookfield, CPPIB, Indus Towers, KKR and Vodafone declined to comment. Representatives for Norges Bank Investment Management, which manages Norway’s sovereign wealth fund, and Aditya Birla Group, the parent company of Idea Cellular, also declined to comment.

Vodafone is planning to seek a buyer for its 42% stake in Indus Towers, while Indian operator Idea Cellular will separately offer its 11% stake for sale, the people said. The assets may be sold to a single buyer to get a better price, the people said.

Bharti Infratel has a first right of refusal on Vodafone’s stake in Indus Towers, according to one of the people. It’s possible any offer the KKR consortium makes for Indus Towers could be made in the form of a share swap, the person said. Bloomberg

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