Elliott takes a stake in telephone pole group Vantage ahead of a possible delisting

Activist investor Elliott Management has taken a stake in Vantage Towers as the German-listed telephone pole company’s largest shareholders prepare to take over the company.

Paul Singer’s investment firm holds 5.6 percent of the voting rights in Vantage, the group that was spun off from Vodafone two years ago, according to a report released Tuesday.

It’s Elliott’s latest foray into Germany after the company last year took a stake in Fresenius, the world’s largest dialysis company.

The New York-based group disclosed its position after Vantage’s new owners made a voluntary takeover bid for the company’s outstanding shares that could result in a delisting in Frankfurt.

In November, Vodafone transferred its 82% stake in Vantage Towers to a new company that will control it jointly with a group of private investors including KKR, Global Infrastructure Partners and Saudi Arabias Public Investment Fund.

The new company then submitted a voluntary takeover bid for the remaining 18 percent of the shares.

However, Elliott’s new position could disrupt that process. The investment firm has previously used German law to participate in takeover targets and push for higher bids.

Vantage operates tens of thousands of cell towers in 10 European countries, including the UK.

Masts, the metal structures that support radio antennas, were among the most valuable telecommunications assets in the era of cheap debt, trading at high prices and offering attractive returns to retail investors.

However, rising interest rates have pushed up the cost of capital for these leveraged companies, causing their stocks to plummet.

As part of the agreement to transfer its majority stake in Vantage Towers in November, Vodafone will sell up to 50 percent of the cell tower business to the consortium of investors.

This deal gives the group access to one of Europe’s largest mast companies, a key element of the communications infrastructure, while freeing up liquidity for Vodafone, which has been under pressure to revive weak performance.

Competitor Cellnex, the largest mobile phone company in Europe, has separately faced its own challenges after a three-year dealmaking tour. Founder and CEO Tobias Martínez resigned earlier this month.

Elliott was active earlier this year and notably built a multi-billion dollar position in software company Salesforce.

Vantage on Tuesday reported a 4.8 percent increase in sales to €263.7 million for the third quarter, citing inflation and rental growth for the rise.

Vantage shares rose 1.5 percent through Tuesday afternoon after Elliott’s position was revealed.

Elliott holds approximately 3.5 percent of Vantage stock, with the remaining voting power controlled through other instruments.

Elliott declined to comment. Vantage confirmed the news but declined to comment further.