Herbert Smith Freehills advises Virgin Media O2 on its £360 million sale of a minority stake in Cornerstone to GLIL Infrastructure LLP

Herbert Smith Freehills has advised long-standing client Virgin Media O2 on the sale of a 16.67% minority stake in its mobile tower joint venture, Cornerstone Telecommunications Infrastructure Limited ("Cornerstone"), to GLIL Infrastructure LLP ("GLIL"), a UK-based infrastructure fund.

Virgin Media O2 will receive £360 million payable in cash at closing of the transaction, which represents a multiple of 18.7x on Cornerstone’s adjusted EBITDAaL for the year ended in March 2023 and will retain a 33.33% stake in Cornerstone upon completion of the transaction.

The sale has been structured through a Virgin Media O2 holding company (“HoldCo”), which owns 50% of the Cornerstone shares. After the transaction, GLIL will own 33.3% of HoldCo and Virgin Media O2 the remaining 66.7%. As the majority shareholder of HoldCo, Virgin Media O2 will continue co-controlling Cornerstone, together with Vantage Towers, and continue to proportionally consolidate Cornerstone in its financial accounts.

Cornerstone is the UK’s largest mobile towers business, consisting of a nationwide network used by both Virgin Media O2 and Vodafone UK as anchor tenants. Cornerstone will remain a critical supplier to Virgin Media O2 following the transaction. 

Herbert Smith Freehills advised on all aspects of the transaction, having advised over a decade ago on the creation of Cornerstone and continuing to advise on Virgin Media O2's wider passive and active mobile network arrangements.

The deal team was led by Head of Global M&A practice Gavin Davies, partner David Coulling and senior associate Laura Ackroyd. The team was supported by Aurell Taussig (partner, Tax), Michael Hunt (partner, Tax), Filip Gavanski, Rajalakshmi Natarajan, David Andrews and Dominic Rowe (senior associates, Corporate) and James Tryfonos (senior associate, Tax).