The controlling shareholders of Italian mobile-tower operator INWIT are arranging financing for a potential take-private transaction after a sharp decline in the company’s market value.
French private-equity firm Ardian and Oak Holdings 1 are exploring a possible offer to acquire shares held by minority investors, according to people familiar with the discussions.
Ardian controls approximately 32% of INWIT.
Oak Holdings, backed by Global Infrastructure Partners, Vodafone and KKR, controls another 39%, giving the two groups approximately 71% combined ownership.
The investors are discussing financing with banks.
Abu Dhabi investment company Mubadala is expected to participate by acquiring an interest in INWIT as part of the potential structure, according to the reporting.
No final transaction has been agreed.
The parties cautioned that discussions remain ongoing, while INWIT said it had no information concerning the matter. Ardian, GIP, Vodafone, KKR and Mubadala declined to comment.
INWIT is Italy’s largest mobile telecommunications tower operator and has been publicly traded in Milan since 2015.
Its market capitalization has declined approximately 27% during the past year to around €6.3 billion, or $7.1 billion, based on Friday’s closing valuation.
One source of pressure is a contractual dispute involving INWIT’s two largest customers.
Telecom Italia and Swisscom’s Fastweb have initiated procedures concerning their existing agreements with INWIT as they seek more favorable terms.
That creates an important valuation issue for any prospective transaction because long-term tower contracts are central to the predictable cash flows that make infrastructure assets attractive to private capital.
INWIT had already been the subject of takeover speculation earlier this year.
The material development now is that its leading shareholders are discussing financing with banks for a potential minority buyout.
For investors, the next signals will be whether financing is secured, whether a formal offer emerges and what premium — if any — the controlling shareholders are prepared to offer minority investors.
