Cellnex will bid for the towers of Deutsche Telekom alone or with a financial partner | Economy

Tobias Martínez (left) and Bertrand Khan, during the press conference prior to the shareholders' meeting, this Thursday, in Madrid.  CELLNEX 04/28/2022
Tobias Martínez (left) and Bertrand Khan, during the press conference prior to the shareholders’ meeting, this Thursday, in Madrid. CELLNEX 04/28/2022CELLNEX

Cellnex is determined to bid for the tower subsidiary of Deutsche Telekom, valued at up to 18,000 million euros, with its own financing or with the incorporation of a financial partner that contributes part of the funds, although it completely rules out carrying out a new capital increase to undertake the operation.

This was revealed by the CEO of Cellnex, Tobías Martínez, in a previous meeting with the media before the holding of the 2022 general shareholders’ meeting. “We have never closed ourselves off from having a partner that adds value to the project, that it is not only money, because this company has access to financing in the debt market, as it has shown in the past, although the date of the process is always led by the seller”, the manager pointed out.

Germany is the only major relevant European market in which Cellnex is not present, so entering it would give it a competitive advantage over its great rivals such as American Tower. Deutsche Telekom has put up for sale 40,600 towers in Germany and Austria in order to reduce debt in a process that can be completed next June. It is estimated that the valuation will be in a range between 15,000 and 18,000 million euros, although the German operator may retain a minority stake in the subsidiary for sale.

The Spanish tower operator would have the support of Brookfield and GIC -Singapore’s sovereign wealth fund which is also a significant shareholder in Cellnex’s capital- as possible partners in the transaction, according to the German financial daily Handelsblatt. Possible competitors in the German bid would be Vantage Towers -Vodafone’s tower division-, the international investment funds KKR and GIP and American Tower. The tower company listed on the Ibex manages 137,000 locations in Europe spread over 12 European countries (Spain, Italy, the Netherlands, France, Switzerland, the United Kingdom, Ireland, Portugal, Austria, Denmark, Sweden and Poland).


With regard to consolidation in the telecommunications sector, Martínez predicted that the ongoing merger between MásMóvil and Orange could also force a consolidation process in infrastructure companies, because “it makes no sense that in a market like Spain it could There will be three network operators, if Orange and MásMóvil finally merge, and at the same time four tower companies (American Tower, Vantage, Totem and Cellnex itself). “Someone is not going to get the numbers”, he has affirmed.

He knows in depth all the sides of the coin.


The manager underlined that, in the case of Cellnex, customers continue to “renew their contracts” and it has a business with different services and is very mature with long-term contracts, with which it has greater diversification and greater “solidity”. “to face consolidation”.

The manager has also defended that the company generates value despite not distributing a dividend by reinvesting in its growth. He has also ensured that a dividend is “not justified” if capital increases are being used. Likewise, the president of the firm, Bertrand Kan, has assured that the company shares the “frustration” with the share price, but has shown his confidence in the future and has pointed out that the markets often value different factors.

Cellnex presented results this Wednesday. Between January and March 2022, it lost 93 million euros, 116% more than in the comparable period. However, it increased its income by 64%, reaching 828 million, while the adjusted Ebitda (gross operating profit) stood at 634 million, 66% more. Growth will be maintained throughout the campaign by consolidating the recent purchases of towers in Poland, the Netherlands, Italy and France, and the integration of CK Hutchison’s assets in the United Kingdom will be completed in the second half of the year. The financial debt amounts to 13,600 million euros, although 86% of the total is referenced to a fixed rate. In March, Cellnex carried out a bond issue for an amount of 1,000 million euros.

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