• Bidders said to value wireless tower assets at $2.2 billion
  • TPG, Tillman consider scrapping buyout of fiber-optic assets

A buyout group including TPG Capital that is bidding for Indian billionaire Anil Ambani’s wireless tower business has valued the assets more than a quarter below an initial estimate, people with knowledge of the matter said.

TPG and Tillman Global Holdings LLC have signaled they view the assets as worth about 150 billion rupees ($2.2 billion), including debt, after conducting due diligence on Reliance Communications Ltd.’s tower assets, down from the 215 billion rupees proposed earlier in the negotiations, according to the people. There’s no certainty the talks will result in an agreement, the people said, asking not to be identified as the information is private. 

Reliance Communications said the bidders have not reduced the enterprise value for the tower business by that amount. “The valuation being discussed for monetization of our tower business is in line with recent comparable transactions,” Reliance Communications said in an e-mailed response.

The firms are also considering scrapping a separate proposed purchase of Reliance ’s domestic fiber-optic assets, according to the people. The Indian operator was seeking a valuation of at least 80 billion rupees for the backbone network, the people said. 

Reliance Communications, reiterating its Dec. 4 statement, said in the e-mail that the sale of the fiber-optic business to the private equity firms “would be explored in a separate and independent transaction after the tower deal is finalized.”

Cutting Debt

The reduced offer, which would still be the biggest private-equity deal in India, is a setback for Ambani’s Reliance, whose net debt stood at 404.8 billion rupees at the end of last year, company filings show. The company wants to reduce debt by no less than 300 billion rupees, it said in the e-mail.

Reliance Communications rose 0.6 percent to 55.35 rupees in Mumbai. The stock has declined 37 percent this year, compared with the 5.6 percent drop in the benchmark Sensex index.

Tillman Founder Sanjiv Ahuja didn’t immediately respond to an e-mail seeking comment, while Luke Barrett, a spokesman for TPG, declined to comment. 

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