Anshuman Daga and Pamela Barbaglia by Andres Gonzalez

SINGAPORE/LONDON – Vodafone (NASDAQ 🙂 has approached global infrastructure funds to invest in Vantage Towers, its $16 million mast company. But sources tell Reuters that Vodafone’s preferred option is an industry merger.

According to one source, the unnamed bidders (including Brookfield investment firm and Global Infrastructure Partners) have recently submitted unsolicited propositions in recent weeks that compared Vantage Towers’ current value of 15 billion euro ($16.57 trillion).

Sources claim that the offers relate to Vantage Towers in a majority of shares. Vodafone had also been studying them but not yet made any decisions.

Vodafone listed Vantage Towers in Frankfurt in 2013 and continues to own 81%. However, Vodafone has been reluctant about engaging in discussions with financial investors in its quest to clinch an industry merge for Vantage with Deutsche Telekom (OTC)’s towers unit DFMG, Orange’s Totem or Orange’s Telekom, according to two sources. They cautioned that no deal was likely.

Brookfield, Orange and Vodafone declined to comment. GIP wasn’t immediately available.

Deutsche Telekom spokespeople said they were looking at strategic alternatives for their infrastructure business. They did not provide further details.

Vodafone is under pressure by Cevian Capital, Europe’s biggest activist fund. They want to streamline its portfolio and improve its strategy in key market markets.

A deal to acquire its tower business from Vodafone would bring Vodafone in line with Cevian’s requests for strategic opportunities.

After the London-listed firm turned down an 11 million euro offer to acquire its Italian operations, and its efforts to consolidate Spain hit a wall in March when Orange (and MasMovil) announced joint talks to merge their Spanish companies.

Executives in telecom have called repeatedly for market consolidation, which would reduce competition and increase profitability of operators at a moment when they are short on cash to fund the 5G mobile phone infrastructure.

“LIKE-MINDED PLAYER”

Vodafone is now focused on extracting value out of its controlling stake at Vantage Towers. Nick Read frequently mentioned Orange’s Totem, Deutsche Telekom and their tower assets as possible candidates.

Read said that Vantage should move on to an industrial merger. Read spoke out last month in support of a potential combination with Orange’s or Deutsche Telekom infrastructure assets.

He said that Vodafone is open to selling its Vantage stake, but that there was still plenty of money for them to monetize the entity while keeping in control with another like-minded player.

Reuters published earlier in the month that Deutsche Telekom was holding an auction for its towers business. The first bids were expected to be received by March mid-March.

Sources said that Vodafone closely monitors Deutsche Telekom’s sale of towers, but it’s more likely to do business with Orange’s Totem than Vodafone because of antitrust concerns in Germany.

According to this source, a deal was not possible with financial investors. It seemed that only an industry-wide tie-up was in the offing.

Telecom towers, which are weighed down by huge debts and high costs, have been the targets of numerous takeovers over the last few years.

In Europe, cell phone operators are looking to make infrastructure deals. Cellnex in Spain and American Tower Corp (NYSE) both have U.S. headquarters.

($1 = 0.9054 euros)