Renta 4 | According to the FT, VMED O2 is preparing a bid alongside private equity fund InfraVía Capital to buy Netomnia, the fourth largest broadband operator in the United Kingdom. The bid is valued at around £2 billion (around €2.3 billion).
Netomnia has a fibre network covering three million homes, which would be added to VMED O2’s Nextfibre network, bringing the total to around 21 million homes.
This operation would bring VMED O2 closer to BT’s Openreach, the market leader with 30 million homes and 21 million with full fibre.
Assessment: This news confirms the management’s interest in participating in the consolidation process in Europe. Although the consolidation process in the UK was expected to be led by smaller operators (AltNets), the financial difficulties they are experiencing complicate their chances of making a competitive bid for Netomnia.
In the case of VMED O2, we note that its debt multiple is very close to the maximum limit (5.5x EBITDA), which we believe leaves little room for additional debt. P/E 4.0. Hold.
