Sprint Corp.’s often rumored plans to sell off its significant tower holdings could be getting closer to a reality as the company reported during its second-quarter conference call that it is exploring strategic initiatives for its approximately 6,300 cellular towers that analysts noted could be worth around $1 billion on the open market.
A number of industry analysts noted last week that Sprint has recently begun offering its tower “book” to potential suitors possibly including AAT Communications Corp., Global Signal Inc., American Tower Corp. and Crown Castle International Corp., though the potential $1 billion price tag could be tough for most to swallow.
AAT told RCR Wireless News last week that it was looking at using proceeds from its recently closed $325 million senior credit facility for acquisitions. The facility includes a $200 million Term Loan B, a $75 million delayed-draw Term Loan A and a $50 million revolver, which the company originally said it would use to repay debt, increase its cash balance and to fund new acquisitions and tower development.
“This facility will leave us with a cost-efficient capital structure and flexibility for growth,” said Jerry Kent, AAT’s chief executive officer.
Crown Castle recently announced it is selling off its U.K. business that includes 3,600 tower sites for more than $2 billion and that it could use some of those proceeds to invest in new U.S. business opportunities.
Raymond James analyst Ric Prentiss wrote in a research note that shares in American Tower and Crown Castle were trading down last week due to their potential interest in Sprint’s towers, though he thought a more likely bidder would be one of the other companies.
“While we expect all tower companies to at least get the book and take a look we think the more likely buyer of Sprint Towers will be Global Signal or a private tower company like [American Tower],” Prentiss noted.
