UPDATE 2-Vodafone's towers arm to float in Frankfurt by end March

(Adds dividend, background)

LONDON, Feb 24 (Reuters) - Vantage Towers, the mobile masts
company spun out of Vodafone Group, plans to float in
Frankfurt by the end of March in a deal that could value it at
up to 18 billion euros ($22 billion), making it Europe's largest
listing so far this year.

Duesseldorf, Germany-headquartered Vantage operates about
82,000 towers across 10 countries, where it is usually the
leading or second largest supplier. Germany is its largest
market, which is one of the reasons for the venue of the IPO.

Vodafone said on Wednesday it would sell a "meaningful
minority" stake to create a liquid market in Vantage Towers'
shares. No new shares will be on offer, meaning Vantage will not
reap proceeds from the deal.

People familiar with the matter said stock worth about 3
billion euros would be sold, possibly giving the company a
valuation of 15-18 billion euros.

That would make Vantage the largest European listing of the
year in a busy season for new issues that has seen $12 billion
Polish firm InPost, $10 billion German used-car
trading platform AUTO1 and $5 billion British boot
brand Dr. Martens join stock markets.

With that valuation, Vantage would also be Germany's largest
listing since energy group Innogy's 20 billion-euro debut in
2016.

Vantage said late last year it expected to report pro forma
adjusted core earnings of up to 540 million euros in the
financial year to the end of March 2021.

Most rival telecom mast companies such as Cellnex,
American Tower, Crown Castle and SBA
Communications trade at 25-30 times their core
earnings.

Vantage said its dividend policy was to pay out 60% of
recurring cash flow and that it intended to pay out 280 million
euros this financial year.

It is on track for a leverage ratio of four times core
earnings at the end of March, allowing it to balance investment,
acquisitions and returns, it added.

Bank of America, Morgan Stanley and UBS
are organising the IPO with the help of Barclays
, Berenberg, BNP Paribas, Deutsche Bank
, Goldman Sachs and Jefferies.
($1 = 0.8228 euros)
(Reporting by Paul Sandle and Arno Schuetze. editing by Louise
Heavens and Mark Potter)