AT&T Inc., the largest U.S. phone company, is seeking buyers for its wireless towers and working with TAP Advisors LLC and JPMorgan Chase & Co. on the sale, according to people familiar with the matter.
The assets could fetch about $5 billion and possible buyers include Crown Castle International Corp., SBA Communications Corp. and American Tower Corp., said one of the people, who asked not to be identified because the process isn’t public. AT&T said in March that it is open to the sale of the wireless towers and other peripheral assets.
A sale would bolster AT&T’s balance sheet as it undertakes a $14 billion network upgrade, plans a stock buyback that may top $11 billion, and considers acquisitions in Europe. The tower industry is consolidating, with fewer companies controlling bigger swaths of the equipment needed to transmit wireless signals amid booming demand for mobile communications.
American Tower, the biggest operator of cellular towers in the U.S., agreed to buy the parent company of Global Tower Partners for $4.8 billion, including debt, earlier this month. The company and rival Crown Castle are increasing their role in the wireless industry, with many carriers selling their antennas to the companies and leasing them back.
Mark Siegel, a spokesman for Dallas-based AT&T, and a JP Morgan spokeswoman declined to comment. Representatives at American Tower, Crown Castle, SBA Communications and TAP Advisors didn’t immediately respond to messages seeking comment.
AT&T has about 10,000 towers which generate about $326 million in annual revenue as other companies pay to lease space on the facilities, JPMorgan research analyst Phil Cusick wrote in an Aug. 9 note. The towers may generate cash flow of about $216 million a year, and a sale at 17-times that figure would fetch about $3.7 billion, he wrote.
The company has explored acquisitions in Europe this year and would look at Vodafone Group Plc assets after the U.K. company sells its stake in a wireless venture with Verizon Communications Inc., people with knowledge of the matter said.
Last November, AT&T said it will invest $14 billion over three years to improve the networks that deliver wireless communications, high-speed Internet access and television services.
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