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Macquarie signals towering ambition
Robert Clow
October 20, 2005
MACQUARIE Communications Infrastructure Group will keep trawling through Australasia, North America and Europe for acquisitions in its key areas of mobile telephony, broadcast transmitters and public services transmissions.

"We have a good pipeline of opportunities for us to assess," chief executive Scott Davies told MCIG's annual general meeting yesterday.

MCIG's name was last week linked with Netherlands-based New Skies Satellites in a potential $1.7 billion deal and the company also seems a natural acquirer for Crown Castle's Australian business, which could be worth as much as $750 million. The US transmission tower owner said this month it was considering strategic options for its non-core Australian business and MCIG was an under-bidder for Crown Castle's larger British business.

MCIG would probably be able to outbid private equity firms in the auction for Crown Castle, because its investors demanded less of a return than most private equity investors. But to outbid the initial public offering market it would presumably have to prove it could manage Crown Castle better than its existing team or finance it more efficiently.

One area MCIG is not focusing on for acquisitions is Asia. "It is not the subject of the same level of focus," Mr Davies said.

MCIG's directors said yesterday that its key assets Broadcast Australia and UK-based Arqiva were performing well. Directors raised their distribution guidance by 8.6 per cent from 36c to 39c representing a 7 per cent yield.

Arqiva, which was formerly known as NTL Broadcast was acquired just five months ago, but MCIG directors were upbeat about its progress and prospects.

"We are able to offer new and existing satellite channels access to the UK," said Mr Davies, speaking about the growth opportunities for the company. "In relation to radio, there are a number of new licences being offered in the UK."

Mr Davies also said that he hoped Arqiva's experience in dealing with the UK's transition from analogue to digital television would help Broadcast Australia as Australia moves more slowly in the same direction.

"While BA maintains the analogue service it is also rolling out digital," said Mr Davies, noting that the Government had dismissed a 2008 deadline as unrealistic for the switch. "We are more than halfway there (to full digital service) and so far we have spent $140 million."

MCIG shares closed down 1c at $5.59, still off the high of $6.74 in July