Cellnex launches the macro capital increase of almost 7,000 million euros at 36.33 euros per share, “with a discount of 17% compared to the terp (theoretical price ex-rights, according to acronym in English) based on the market price at closing this Monday, of 46.68 euros and including the subscription rights”, according to the company. The gross price is 22% lower, and up to 26% compared to the 49.17 euros of the advance that was made for the operation on February 3.
As detailed by the communication tower company through the relevant fact distributed by the CNMV, the aforementioned capital increase “will be carried out at a unit issue rate of 36.33 euros per new share, through the issuance and circulation of 192,619 .055 ordinary shares of the company with a nominal value of 0.25 euros each, of the same class and series as the shares of the company currently in circulation”.
The same statement indicates that each share of the company currently in circulation “will grant the right to receive a preferential subscription right and 48 preferential subscription rights will be necessary to subscribe 19 new shares.” The preferential subscription period will be extended for fifteen calendar days, until next April 15, from March 31.
These new shares represent 39.57% of the shares currently in circulation. “The terp will be 43.75 euros per share, that is, the initial price of the subscription right will be 2.93 euros,” explains Ángel Pérez, an analyst at Renta 4.
The capital increase is the largest raised in Europe “in the last 10 years” by a non-financial company, according to the CEO of the communication tower company, Tobías Martínez, who was held this Monday and who authorized the board of directors to launch the increase, which reaches close to 30% of the current capitalization of Cellnex, of 22,719 million euros, at the close of this Monday.
Cellnex soared on the stock market, at the most bullish moment of the session prior to knowing the price of the macro increase, by stepping aside the Benetton family, the company’s main shareholder until now, which did not contemplate going to the capital increase.
The sale of a small group of its participation – until today it held 13.02% through Edizione – before being diluted “reduces the uncertainty about the operation”, defend different experts who prefer not to be quoted.
The sovereign wealth fund of Singapore (GIC) increased its by 2.5%, from the previous 5.5%, acquiring the package of shares that the Benettons have released, and reinforcing its position before the increase, according to Bloomberg.
purchase recommendation
Cellnex reaches the increase, with which it intends to extend its policy of acquisitions in Europe to continue growing, on its shares from the consensus of analysts that follows its listing -one of the five best councils of the Ibex 35- and with a target price average that touches the 66 euros, which implies an upward potential of about 40%.
The CEO of Cellnex Telecom, Tobías Martínez, stated at the general meeting of shareholders that the increase already has the irrevocable commitments of around 25% of the shareholders, including Goldman Sachs and the aforementioned GIC, according to Tobías Martínez. Other investment banks such as BNP Paribas JP Morgan and Barclays are added to the above.
The capital increase is one of Cellnex’s instruments to finance its growth, together with the debt issue. Right now it has an investment portfolio of 18,000 million, of which 9,000 have already been executed.
The company’s chief executive compiled that, since February 2018, Cellnex has increased capital by nearly 15,000 million: 3,700 million in 2019, 4,000 million in 2020 and these 7,000 million in 2021.
strong growth
Martínez outlined the notable growth of his group in recent years, “thanks to a great investment and integration effort, as well as the work of the mergers and acquisitions team”, which the CEO ranked among the best in the world. As he indicated, 2020 has been “a strong investment year”, with 16,000 million destined or committed in the year. In fact, this annual bet would increase to 24,000 million if the investments made in 2019 are added.
Despite the effort in new acquisitions of telephone towers and a presence in 12 countries, the CEO of Cellnex emphasized “that 2020 has allowed us to grow organically, with day-to-day work, which reflects the company’s reliability with its customers” , as has been shown with Hutchison, Iliad, Altice or Deutsche Telekom, among other operators. In his opinion, Cellnex “doesn’t take a break” to grow since it analyzes all the possibilities, so that “when an opportunity appears, it hardly surprises us”.
According to the group’s forecasts, Cellnex will grow at rates of 20% each year until 2025. In the same time, EBITDA will evolve at annual rates of 24%, while free cash flow will grow 28% per year in the next four years , with 2,000 million and 2,200 million annual and recurring cash generation, respectively.
Martínez also indicated that, since going public in May 2015, the group has grown 269% in income, 393% in EBITDA, 304% in cash flow with investments of 37,000 million euros.
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