Barclays Bank today highlighted Cellnex’s ability to enter into an agreement and acquire towers from Deutsche Telekom, the major operation currently open in the infrastructure sector. In a report published today, the bank believes that the estimate of 18,000 million euros for the tower division of the German telecom operator is too high, and indicates a value of 17,000 million, of which 14,000 million correspond to the infrastructure in Germany and 3,000 million to Austria, where Cellnex is already located. The German group launched the potential sale of these towers, to which groups such as Cellnex and American Tower will be presented.
The financial entity notes that assuming Cellnex initially acquires 60% of Deutsche Telekom’s tower division, the total cost of this participation would be approximately 12,000 million. The German telecom operator has already said that if these assets are sold, it will remain a minority partner. According to this hypothesis, according to the bank, the Spanish group will need to finance about 7,300 million euros.
Barclays explains that Cellnex could fund 4.4 billion euros through leverage, raise another 2.2 billion euros from the sale of minority stakes in subsidiaries, including Cellnex France, and another 800 million euros through equity. “It’s a much smaller number than the market fears,” the bank says.
The company has increased its capital by more than 14,000 million euros in recent years, with the last major operation reaching 7,000 million in 2021. At the end of 2021, Selinex had available cash, treasury and undrawn debts of nearly 8,600 million. The company should close its purchase of Hutchison Towers in the UK in the coming months, once it has received a license from competition authorities. In this case, the Spanish company plans to raise capital, which will give the Asian group up to 4.8% of its capital.
In this way, Cellnex’s leverage in 2023 will be 7.5 times that of Ebitda, just over the seven times the company has set a maximum in its targets. In this case, the bank believes the company has a significant ability to reduce debt at an annual rate of 0.7 or 0.8 times that of Ebitda.
Overall, Barclays supports Cellnex’s strategy and reduces the company’s merger risks for operators in Spain, Italy and the United Kingdom. The maximum impact will be 10% of the cash flow. These analysts set a target price for Cellnex shares at €67, a figure that indicates a potential upside of 62%.
On Thursday, Cellnex stock rose 4.3%, to €43.1, ranking first by value on the Ibex 35. The company hit an all-time high last summer, trading above €61.
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