TPG seeks $1b for Vision Networks, gets $6.3b bid for fibre assets

afr.com:

Ask and you shall receive. Take it from TPG Telecom.

TPG Telecom boss Inaki Berroeta. Louie Douvis

Just as the naysayers were talking down TPG’s long-running auction to sell its wholesale broadband business Vision Network for circa $1 billion, the ASX-listed telco and its advisers at Bank of America pulled a rabbit out of the hat – a $6.3 billion bid from Vocus Group for its fibre assets.

The talks, revealed by Street Talk on Tuesday and later confirmed by TPG in a statement to shareholders, are an exciting development for telco bosses.

They’ve perfected the playbook of de-gearing their balance sheets by selling and leasing back their tower assets. Now, TPG and Vocus are about to test if the same trick could work for the fibre that connects the towers and other nodes in a telco’s infrastructure.

TPG’s big competitors Telstra and Optus have flirted with the idea of spinning out fibre assets, but are yet to make progress on a deal. Telstra’s InfraCo Fixed potential separation was announced last year, while Singtel-owned Optus is reported to have weighed a strategic review of the assets.

(Vocus is an outlier, and has always been known more for its cables than its retail prowess. It is being advised by Macquarie Capital and UBS.)

It’s an entirely different story in towers.

Telstra set off a string of tower deals, selling a 49 per stake to a Future Fund-led consortium in mid-2021 for $2.8 billion. Optus followed, offloading a 70 per cent stake in its towers to AustralianSuper later that year.

TPG was the last out of the gates among the local players, and last year sold its passive mobile towers and rooftop infrastructure to OMERS for an $890 million payday. In New Zealand, Spark NZ sold 70 per cent of its towers to Ontario