Report: AT&T may sell cell towers for as much as $5B

AT&T (NYSE:T) is looking to sell its cell towers and is working with TAP Advisors and JPMorgan Chase on a deal that could value the towers at as much as $5 billion, according to a Bloomberg report.

The report, which cited unnamed sources, said AT&T could offload the towers to one of the three major U.S. tower companies: Crown Castle, SBA Communications or American Tower. In March, AT&T indicated it was open to selling some of its non-core assets, which might include wireless towers.

The report comes shortly after American Tower announced plans to acquire privately held rival Global Tower Partners in a deal valued at $4.8 billion, including debt. GTP was the largest privately held operator of U.S. cell towers. American Tower said the deal is expected to close in the fourth quarter of 2013.

AT&T has about 10,000 towers, which generate about $326 million in annual revenue through lease agreements, JPMorgan research analyst Phil Cusick wrote in an Aug. 9 research note, according to the Bloomberg report. A sale could bolster AT&T's balance sheet and allow it to focus on more profitable parts of its wireless business--and lease back the towers from whomever AT&T sells them to.

Spokesmen for AT&T, JPMorgan and American Tower declined to comment, according to Bloomberg, while representatives of Crown Castle, SBA Communications and TAP Advisors didn't respond to messages seeking comment, the report said.

At an investor conference last month, American Tower CFO Tom Bartlett hinted that the company was interested in M&A in the tower market. Bartlett noted at the time that Verizon Wireless (NYSE:VZ) and AT&T each own more than 10,000 towers and that smaller carriers could look to monetize their towers as well (U.S. Cellular (NYSE:USM) has said it is considering selling its towers in markets it has divested, but not in its core markets).

American Tower also recently agreed to buy around 2,790 towers in Brazil and 1,666 towers in Mexico from NII Holdings for a total of $811 million.

For more:
- see this Bloomberg article

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