Exclusive: CPPIB drops pre-emption rights in Arqiva sale

The UK telecoms group is set to be divested by CPPIB and Macquarie, its lead shareholders, in a deal potentially worth up to £6bn.

British telecommunications firm Arqiva is set to be sold for between £5 billion ($6.3 billion; €5.8 billion) and £6 billion after Canada Pension Plan Investment Board, its largest shareholder, renounced its pre-emption rights on the 25 percent stake owned by Macquarie Infrastructure and Real Assets.

Macquarie, which holds its share through the €4.6 billion Macquarie European Infrastructure Fund 2, last year began preparations for a sale of its stake as it began to liquidate MEIF2, which runs until 2018. The pre-emption rights held by CPPIB for any of Arqiva’s shareholders’ stakes made a Macquarie exit on its own a difficult sell to potential buyers.

CPPIB and Macquarie are now looking to exit together, Infrastructure Investor understands. They are said to be favouring a private sale, though industry insiders said an IPO remains a possibility.

The transaction is now expected to fetch up to £6 billion, although it is unclear whether Arqiva’s other shareholders – IFM (14.8 percent), Motor Trades Association of Australia (5.2 percent) and Health Super Investments (5.4 percent) – are also looking to exit.

CPPIB, Macquarie and IFM declined to comment. MTAA and Health Super Investments had not responded to requests for comment by press time.

Arqiva provides infrastructure and broadcast transmission facilities in the UK and Ireland, as well as smart metering in Scotland and the north of England.

Recent years have seen the company shift its focus to invest more in core infrastructure after undertaking an operating review in 2015. Its last year-end accounts in June 2016 show a 2 percent rise in EBITDA over the previous fiscal year, to £428.4 million.