Friday, January 21

Cellnex’s next big move will be underpinned by a capital increase

Cellnex’s growth found an expansion route in Germany with the telecommunications towers that Deutsche Telekom has placed on the market.

Specifically, the German telecommunications operator would be preparing the sale of a stake in these assets, whose valuation could reach 20,000 million euros, including the debt, according to the newspaper Handelsblatt.

Although the news does not come as a surprise in the market, given that this is the trend that the large operators are following, it is the fact that Deutsche Telekom has been opened for sale of a majority stake.

This decision puts Cellnex squarely in the pools of potential buyers, as it fits in with the group’s strategy of controlling the management of the assets in which it invests.

Furthermore, if there is one thing that is clear in Cellnex, it is the unwavering support of its shareholders for the growth of the group, as shown by the success of the capital increase last April.

It is true that the value has just marked one of the biggest falls of the year due to the regulatory obstacles in the United Kingdom for the purchase of the Hutchison towers. But the sources consulted by they trusted in the final success of the operation.

Perfect strategic fit for Cellnex

The truth is that the towers of Deutsche Telekom would be for Cellnex an asset “with absolute reserve requirements”, explained the analysts of Sabadell Bank.

With this purchase, the group could enter the German market and continue to consolidate its position in the European market.

Of course, “it could be interesting to continue growing” and reinforcing Cellnex’s expansion, which “has done very well in recent years,” he told Miguel Momobela, XTB analyst.

What they are doing “is to ensure the possible dominance of the market, because practically all the enclaves in terms of telecommunications infrastructures already have their names and surnames,” added this expert.

In the end, the group is in a phase in which for next year what it should do is continue to grow, because the fundamental data accompany it, added the sources consulted.

Possible capital increase in Cellnex

What the experts rule out is that Cellnex are going to consider buying a minority stake in these assets.

“We would rule out the purchase of a minority stake since it does not fit with the company’s strategy, which seeks control and management of the assets acquired,” said analysts from Sabadell Bank.

However, the 20,000 million euros that the German press is talking about could oblige Cellnex to undertake a capital increase, which could reach 9,000 million euros, according to Sabadell experts.

The sources consulted do not rule out that other formulas be studied to accommodate the operation, such as the entry of minorities or the offer of shares in the company itself, but of limited size, maintaining its independent character.

They would be steps to make the possible operation cheaper, although the truth is that Cellnex cash account with 9,580 million euros, according to the latest results as of September 30, 2021.

The 55 euros as a rebound target at Cellnex

After last week’s falls due to doubts about Hutchison’s operation, the downward pressure stabilized above 48 euros.

Market doubts seem normal, but as he said Momobela, the situation is not overly worrying.

In this sense, the analysts of Sabadell Bank They recognize that a period of uncertainty is opening, but they still do not change their fundamental vision. “We trust that the company will present a plan of ‘remedies’ that will satisfy the British regulator,” they pointed out.

In the worst-case scenario, the new conditions would have an impact of 7.5 percent on ebitda, these experts added.

In any case, the titles of Cellnex they corrected to 48 euros, an area from where the price should begin to rebuild the rebound.

“What is possible is to expect a fairly wide space for growth,” he said. Momobela. In his opinion, a reasonable objective is the last ceiling of the price, at 55 euros. The bounce margin to these levels is 14.5 percent.