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Cellnex jumps into the shop window: the market is coming

Cellnex it’s on the sideboard. The change of cycle in the telecommunications infrastructure company, its drop in the stock market -40% last year and 50% from highs, although in yesterday’s session it recovered almost 10% due to rumors of a takeover bid-, the loss of strength of the Benetton and a very fragmented shareholding make it one of the great candidates among the Spanish listed companies to change hands in the coming months, as seen this Friday.

The information about a supposed interest of American Tower, Cellnex competitor, along with the fund Brookfield for launching a takeover bid for the Spanish company, disseminated by okdiary, have shot up their shares on the stock market by 9.8%, to 36.50 euros. This is the most evident sign that the market believes that the operation is plausible or, at least, Cellnex is a candy in the Spanish stock market.

Financial sources assure Digital Economy that the interest of the American giant has taken them by surprise: that operation does not seem to sound among the investment banks. In addition, Cellnex has not had to submit information to the CNMV, which indicates that it is either very green or does not end up giving it credibility. But the truth is that investors have reacted. Why have they done it?

On the one hand, because the company was once again at an attractive price: after reaching a ceiling above 60 euros in 2021, last year it lost 40% of its value. But also because they see a realistic option for there to be a takeover bid for the company that is still run by Tobías Martínez. Everything indicates, say the same sources, that she is a candidate to be oped, either by American Tower –it seems the most plausible option– or some investment fund.

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The signs are numerous. The first of these is the moment that Cellnex is experiencing. After seven years of almost uninterrupted growth, going from being a subsidiary of Abertis with its towers in Spain to being a European leader with a presence in a dozen countries, its shareholders have decided that the time has come to digest the purchases and start earning money and distribute dividend. The expansion has concluded, the cow has already been fattened, the time has come to get a return on it.

The second is its shareholding situation. The takeover bid for Abertis left the Benetton family as reference shareholders with 29.99% of the company. And it would probably still be the case, since the Italian saga was delighted with this investment, if it had not been for the accident at Ponte Morandi, owned by another of its investees, Atlantia, which forced the family to make divestments to face compensation and losses in its main business.

For this reason, the Benettons gave entry to some funds, first with half of their participation, but later they sold more until they were left with the current 8.5%. They are still the main shareholders of Cellnex but they are no longer strong, they cannot face a takeover bid -they have just completed one for Atlantia-, and neither are the rest of the partners: the shareholding is fragmented and each fund looks out for its interest.

The price, advantage for buyers and sellers

This fragmentation and the fact that it does not have a hard core of shareholders makes it easier for the company to change hands. As it is difficult for any shareholder to fight and present a counter-offer, potential interested parties will think less of it when it comes to taking an interest in Cellnex. In addition, it is easier to exceed 50% in the takeover bid if the offer is attractive. In fact, it’s almost guaranteed in a company that went public at €14 a share and is trading at more than double that price.

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In fact, the price and its trajectory from the jump to the parquet is another factor that puts it on the sideboard. At 60 euros it might have been expensive, but its drop to 32 euros put it in a good situation, since it was not only a company in a position to start giving results and little opposition to be opposed, but it also had an attractive price.

Luciano Benetton (right), patriarch of the family that owns Atlantia, Abertis, Cellnex and the famous fashion firm, with his son Alessandro. GETTY

But at the same time, and although it may seem contradictory, the price is good for the one who buys but also for the one who sells. Not for everyone but for many. The Benettons entered at 21.5 euros, the GIC fund (7%) also, while Criteria (4.77%) has the majority of shares since the IPO. All of them would sell with large capital gains, so they may be interested in selling.

Other funds, such as Canada’s pension funds (4.97%), Blackrock (4.95%) or The Children’s Investment Master Fund (7.09%) paid higher prices and could lose out, although it depends on the final price. of the takeover bid, if presented. They could also choose to remain partners and wait for dividends before jumping ship.

The option for American Tower to go through Cellnex had already been mentioned and it seems the most reasonable: it is the only company in the sector that can do so, because although it has a smaller market in Europe than Cellnex, it is much larger due to its business in America and is worth more than 100,000 million dollars on the stock market, four times more than the Spanish company. In addition, it would go hand in hand with an investment fund.

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