CityFibre weighs up £1bn stake sale to ramp up fibre rollout
CityFibre is reportedly closing in on sale a £1 billion stake in its business, to help fund an expansion of its fibre rollout plans.
According to the Mail on Sunday, CityFibre CEO, Greg Mesch (pictured) confirmed that the company is in discussions with 20 pension and infrastructure funds from across the UK, North America, Europe and Australia about the aforementioned stake in the business.
“You've got 20 different firms that want to be in fibre infrastructure in the UK. It's a hot place to be. It's a great market,” he told the publication.
Joining existing shareholders West Street Infrastructure Partners and Antin Infrastructure Partners, which both hold a 35% stake each, bidders for the 30% up for sale include The Ontario Municipal Employees Retirement System, who are said to be vying for the share.
Should a deal be struck over the coming months, the £1 billion share would value CityFibre at approximately £3 billion. The proceeds of the transaction would see the company up its goal of connecting 8 million locations by 2025, to 10 locations homes within the same time frame.
“We're going faster than we ever have. The pandemic was a plus for us [from a business perspective]. We thought at first it could be a very, very bad thing. But it turned into an accelerator,” said Mesch.
'We were able to build quicker because the pandemic had everybody off the roads – or at least out of the way. And unlike BT and unlike Virgin, we didn't stop. We remobilised, we recommitted, we went stronger.'
CityFibre is the third largest fibre infrastructure provider in the UK, behind Openreach and Virgin Media. Its current customers include, TalkTalk and Vodafone, and has recently applied for additionally funding as part of the Government's £5billion Project Gigabit programme.
BT’s CEO Philip Jansen earlier this month announced plans to create 7,000 additional jobs as part of BT’s plan to connect up to 25 million homes by 2026, an increase of 5 million on its previous stragey.
The news that hasn’t phased Mesch and CityFibre’s plans, however, saying, “That was already in our plans. We think we can get our build rate equal to or greater than BT's build rate within the next 24 months.”