Italy’s Rai Way is making a joint binding offer with F2i for Italian digital terrestrial multiplex operator Persidera. The Persidera unit, which owns and manages five DTT multiplexes, is being sold by Telecom Italia (TI) as part of Vivendi’s plan to obtain EU antitrust approval for gaining control of TI.
A report from investment bank Berenberg quotes Italian press saying the offer values Persidera at less than €250 million, well below the €350-400 million that earlier press reports had indicated TI was looking to achieve back in October. “Rai Way has not given any valuation or financial details at this stage, but we understand that, at €250 million, the deal would value Persidera at c6x EBITDA margin. This would appear at face value to be a very cheap deal for a tower company that has a 50% EBITDA margin.”
“In our view,” says the bank’s report, “the transaction would appear to fit with Rai Way’s objectives of increasing the number of multiplexes it manages. The company has a large fixed cost base and could leverage many of these costs, such as personnel or other infrastructure-related expenses, and thus could exploit many cost efficiencies if this transaction is completed. Additionally, over the medium term, much like the arguments we propose for a deal with EI Towers, Rai Way could take advantage of network rationalisation and remove any duplicate coverage where it is not needed.”
“Italian regulation currently stipulates that no operator can obtain more than five national multiplexes; Rai Way already hosts five for RAI Group and Persidera owns a further five. Rai Way’s offer, however, appears to be structured in a way which the company believes will satisfy the regulators’ concerns. According to the structure of the deal envisaged in the offer, F2i would hold and manage the rights of use of the spectrum currently granted to Persidera for its DTT multiplexes. Meanwhile, Rai Way would acquire the network infrastructure with the simultaneous signing of a long-term agreement for the supply of broadcast services. To us, this appears to be a satisfactory workaround, but it will be up to the Italian regulators to decide whether the structure satisfies their concerns,” states Berenberg.