Telus narrowed the field to three Canadian funds in $ 1.2 billion bidding was for Cell Towers

The Telus Corp. TT has limited the list of buyers to three large domestic asset managers, including two main pension funds, in a transaction worth $ 1.2 billion.

The telus-based telus in the second round, according to sources that are familiar with the process, speaks a 49-pro-cent interest in its 3,000 goal network. The Ontario Municipal Employees Retirement System (Omers) and the infrastructure low of the Brookfield Corp. According to three sources, the final bidders are among the final bidders, while the British Columbia Investment Management Corp. (BCI) also sits at the table.

The globe and the mail do not call any of the sources in this story because they are not allowed to speak publicly about the transaction. The conversations continue and there is no certainty that a final deal will be achieved.

The asset managers offer approximately $ 1.2 billion for a minority that is captured on the towers, which Telus wants to turn off as new company called Terrion, according to one of the sources. All three fund managers have significant investments in the telecommunications infrastructure.

This winter, Telus made the proportion of his towers for sale to reduce debts. Telecommunications commissioned TD Securities with the execution of the process that Banker Project Air referred to.

Telus has announced that investors and analysts are his goal for the announcement of a transaction at the end of October, and the company wants to complete the transaction by the end of the year. If the Spin Out goes in the future, according to the company sources, the former Vice President of the Technology Strategy and the Business Transformation Eros Spadotto Chief Executive Officer will be Terrion.

In a statement, Telus spokesman Richard Gilhooley refused to respond to specific questions about the negotiations.

“Although, as already announced, we cannot comment on, Telus evaluates a potential partnership for a minority stake in our world-class portfolio of wireless towers,” said Gilhooley.

He said the initiative reflects the company's commitment to long -term growth because it would like to strengthen the balance sheet and that 100 percent of a loss of debt would be used.

Spokesman for BCI, Brookfield and Omers rejected a comment.

Why do Canada's largest telecommunications companies sell submissions in their core infrastructure?

The potential tower sales are part of a trend in which Canadian telecommunications companies follow global colleagues through the sale of infrastructures. In June, Rogers Communications Inc. closed a sale of $ 7 billion in a minority stake in its wireless Backhaul department to a consortium, which was led by Blackstone Inc. and five domestic pension funds, including BCI.

In recent years, BCI has invested in telecommunications towers in India in an instance in cooperation with Brookfield's infrastructure. In June, the BC-based pension fund manager bought a minority stake in a telecommunications infrastructure company, Pinnacle Towers, based in Asia, from KKR & Co. Inc.

Brookfield in Toronto, together with India Cell Tower Networks in France, Germany and Austria.

In 2022, Omers' infrastructure had one of the largest telecommunications networks in Australia with two acquisitions worth more than $ 1 billion. The fund manager also has fiber optic networks in Germany and France and invests in the Canadian Fibre network provider Beanfield Technologies Inc.

Last year's Tower Network from Telus estimated sales of $ 160 million and cash flow of $ 110 million, according to a sales book received by The Globe. Telecommunications said its towers generated consistent income based on long -term contracts with airlines and locations in six of the seven largest urban markets of Canada. Pension plans evaluate assets with a predictable cash flow that increases with inflation.

At the beginning of the sales process, one of the largest owners of the telecommunications infrastructure in North America, SBA Communications Corp., had discussions with Telus and its bankers. The companies decided in Boca Raton, Floridusia, decided not to make an offer, since its managers wanted to control the telus department, which the Canadian company rejected according to two sources familiar with the matter.

SBA has around 40,000 towers, including 400 in Canada, and has a market capitalization of $ 25 billion. The company's strategy includes merging acquired networks in its existing operations on the crooked costs, a process that would be difficult with Telus as a controlling shareholder.

The SBA communication did not answer a request for comment.

Other US companies, including American Tower Corp. And Crown Castle Inc., also decided not to offer for the Telus network, since they were unable to determine how it is carried out, the two sources said.

Canada is unique among the developed markets, since its airlines have largely not switched off their infrastructure, including towers, since the companies have insisted that the control of these assets is of crucial importance for the efficient provision of services. But high debt loads, which are largely driven by expensive network expansion, have forced them to rethink.

The parent company of Telus, Rogers and Bell Canada BCE Inc. have made aggressive plans to reduce the lever in a slowly growing, saturated market. In the last quarters, the telecommunications companies do not charge to reduce the joint ventures and in the case of BCE-Die dividend distributions to reduce the load.

Telus currently has long-term debt of around $ 25 billion and is aiming to bring net debt to EBITDA to 3, from 3.9 currently (without restructuring and other costs) to 2027. The company has said that the reduction in leverage has a top priority and also sells copper and real estate to achieve its goal. In addition, it recently collected $ 1.5 billion in notes by issuing long-term junior posts, partly to repay the debts.

BCE has kept financial advisor to evaluate the best way to the surface of its infrastructure. It recently sold its share of $ 4.7 billion in Maple Leaf Sports & Entertainment to Rogers and is in the process of selling its Northern Telecom Northwestel brand for $ 1 billion. It recently included an asset manager to share the pension investment board in Montreal based in Montreal in order to share the costs for the expansion of its US Internet content.