Cellnex Bets On Inorganic Growth: Considers Buying 28,000 Towers From Hutchinson

Cellnex buys El Corte Inglés' antenna business for € 70MCellnex will continue consolidating its leading position in Europe

Cellnex would be studying taking a minority stake in the European telecommunication tower network CK Hutchison, which is valued at about $10 billion, according to Bloomberg. CK Hutchison would have been working to spin off the towers as an independent business and would consider selling a minority stake. This has been linked to news about Cellnex potentially making a €3 billion capital increase to raise funds for a large operation.

Santander Corporate & Investment’s analysts believe the acquisition of a minority stake in a telecommunications tower business would imply a deviation from Cellnex’s growth strategy up to now. This has focused on buying complete networks.

“Cellnex’s management team has communicated its willingness to acquire minority stakes if they can facilitate ‘the clear path to control.’ CK Hutchison’s network would fit into Cellnex’s portfolio because of its assets and locations. But the ‘cost of the clear path to control’ could be higher than shareholders and creditors would be prepared to assume, (even with Cellnex’s share price at record highs.)”

“However, we believe Cellnex will continue to ensure its credit rating stability with a corporate strategy based on prudent financing.

On the oher hand, Bankinter’s experts consider that this inorganic growth strategy for Cellnex is the “right” one.

“It has recently bought assets in the UK (Arqiva), France (Bouygues) and Portugal (Omtel). We believe it is pursuing leadership in Europe in a business that is free of regulatory risk and which it manages well.”

The newspaper Expansión has also published that BNP Paribas and Sumitomo are going to finance Cellnex’s assault on the London underground.

The company already has 400 million euros in hand to bid for the contract to roll out 4G mobile connectivity across the underground sectors of the London underground network. The two banks are opening up the process to share the loan with other entities.

Meanwhile, Italian concessions group Atlantia, core shareholder in Abertis, has reached an accord to extend for one year, until July 12th, 2021, its repurchase option on 5.98% of Cellnex. This was an agreement it made in 2018, during the sale of its participation in the telecoms giant to Edizione, the Benetton family’s holding.