ATC may walk out of talks with Viom

American Tower Corporation may walk away from the discussion for acquiring Viom due to gap in valuation. The two sides have been in talks for nearly a year, however, no deal has been signed yet.

According to multiple sources, ATC could exit from the discussions with Viom if the deal does not get signed over the next few weeks.

“The American company seems to be running out of patience as the discussions have prolonged way too long. There are other assets in the markets which ATC could look at for scaling up India operations,” said an industry source, who is aware of the ongoing discussions between the two sides.

Key factor ATC has been in talks with Viom Networks since June but the negotiations started seriously only in October. The big point of difference is the valuation with Viom promoters wanting to use Bharti Infratel as the benchmark. Viom is a joint venture between Srei Infrastructure and Tata Group and has over 42,000 towers. Bharti Infratel, on the other hand, has 35,000 towers of its own and has a 42 per cent stake in Indus Towers, which has over one lakh towers.

Sources said that ATC could initiate discussions with Reliance Communications to buy its tower assets under Reliance Infratel. Reliance has been looking to sell its tower assets for several years. It had started discussions with large private equity players, including Blackstone and Carlyle, but the talks failed.

After staying low for a while, Reliance has once again expressed interest to sell the tower assets. “ATC is yet to do a big ticket acquisition in India so it has a number of options now other than Viom,” said the industry source.

Last month, ATC acquired the telecom tower assets of KEC International Ltd for ₹81 crore. In 2009, ATC had acquired 1,700 towers of Xcel Telecom, founded by former BPL Mobile Chief Executive Officer Sandip Basu, for an undisclosed amount. In the same year, it announced the acquisition of 400 towers from Kolkata-based tower company Transcend Infrastructure for about ₹95 crore.

Biggest deal The biggest deal, however, came in 2010 when ATC acquired 4,630 towers from the Essar Group for about ₹2,000 crore. However, it has not been able to close any major deals in India since then as it has in other markets. Recently, it bought nearly 11,300 towers from Verizon in the US for just over $5 billion.

For Srei, the deal with ATC may not be the only exit route. The company had earlier said that it was looking to go for an IPO or bring in private equity funds.

“There is no need to do a distress sale. We know what the company is worth,” said a source close to the Srei camp.

The Tatas may, however, want to unlock the value in Viom quickly and use the proceeds to buy out DoCoMo’s stake in Tata Teleservices.