From Breakingviews - Ardian mobile towers pounce would be a mouthful
Mobile towers are in hot demand among private equity players because of their steady cash flow. INWIT also has more telco operators per tower than rival Cellnex
in Italy, according to Morningstar. Long-term leases, already secured with TIM and Vodafone, make the company particularly attractive. A deal would not come cheap. At 11.8 euros a share, the stock is at a record high. A 20% premium may value INWIT at 17.7 billion euros, including net debt of around 4 billion euros. If the group can deliver an operating profit of 650 million euros in 2025, as per Refinitiv forecasts, Breakingviews calculations suggest the return on investment would be a meagre 3%. That’s below INWIT’s probable cost of capital of 7%.
20 times, Ardian would need to either pay a stingier premium or rely on growth to make it worth doing.
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