(Reuters) – About seven bidders are lining up for Telediffusion de France’s (TDF) domestic business and lenders are preparing debt packages of more than 2 billion euros ($2.7 billion) for a deal worth about 4 billion euros, people familiar with the matter said.
Interested parties include U.S. mobile tower operators American Tower (AMT.N: Quote, Profile, Research, Stock Buzz) and Crown Castle (CCI.N: Quote, Profile, Research, Stock Buzz), Canadian pension funds CPP and PSP Investments, infrastructure funds Antin of France, Australia’s AMP Capital and Macquarie (MIC.N: Quote, Profile, Research, Stock Buzz), three sources said.
Leveraged buyout firms are also expected to show interest, but they might find it harder to bid more than cash-rich pension funds and tower operators expecting synergies, the same people said.
Because of a relative dearth in merger and acquisition activity this year, the deal is attracting a lot of interest from bankers.
Players are expected to make offers for the domestic unit of the digital television distribution group by Friday’s deadline for first round bids, the sources said.
Paris-based Antin Infrastructure is expected to join forces with other players as it might not be able to table a 4-billion bid alone, two of the sources said.
Asian players familiar with the infrastructure sector could also be interested in TDF’s French unit, the same people said.
TDF is owned by private equity firms Axa Private Equity, Charterhouse and Texas Pacific Group (TPG) as well as French state-backed investment fund Fonds Strategique d’Investissement.
It hired Goldman Sachs (GS.N: Quote, Profile, Research, Stock Buzz) and Rothschild to run a sale process earlier this year for the unit, the sources said.
TPG, Charterhouse, PSP Investments, Macquarie, CPP declined to comment while none of the other parties were immediately available for comment.
TDF sold its Finnish arm Digita to Australia’s Colonial First State asset manager last year.
Its French unit is the main part of the remaining business and could be worth over 4 billion euros based on current earnings before interest, taxes, depreciation and amortization (EBITDA) of 360-380 million euros and sector multiples of 10.5-11.5 times EBITDA, the sources said.
The private equity funds which bought TDF in 2006 are seen as unlikely to sell for less than 4 billion euros ($5.33 billion), the same people said.
After a successful sale of the French unit the owners are expected to sell the rest of the business, most of which is based in Germany, separate banking sources said.
“The French business is the main business and they can realize most value by selling the company off in parts, starting with France and then the rest,” one of the bankers said.
Bankers are working on debt packages of around 2.3 billion euros or 6.5 times TDF’s French unit’s approximate 360 million euro EBITDA, two of the bankers said.
Debt could be structured in a variety of ways, including classic leveraged buyout financing, a hybrid infrastructure deal or as an investment grade financing, two of the bankers added.
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