Hispasat sale “positive” for SES, Intelsat, Eutelsat

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Hispasat’s fleet of 11 active satellites, including the powerful Amazonas pair serving South America, are being bought by Red Eléctrica for €949 million. The Spanish electricity and telecoms company is buying 89.7 per cent of the business, subject to regulatory authority.

Sami Kassab, an equity analyst at investment bank Exane/BNPP believes the deal is good news for Hispasat’s main rivals, Intelsat, SES, Eutelsat and others.

He said: “Following our discussion with Red Eléctrica, we estimate that the group paid an 8.3x EV/EBITDA18 multiple to acquire this stake. The operating performance of Hispasat coupled to this valuation multiple lead us to argue that Eutelsat (+), SES (+) and Inmarsat (=) look cheap. Inmarsat continues to grow. SES is likely to report a return to top line growth for FY18 while Eutelsat is guiding for a return to growth in H2 19. Yet, Eutelsat and Inmarsat trades on 7.5x calendarised EV/EBITDA18 and 7.0x respectively.”

Kassab reminded clients that SES currently trades on 9.6x EV/EBITDA18.  “However, assuming that SES core business is worth 8.3x EV/EBITDA then we argue that the market is currently assuming C-band pricing of only USD0.11 per Mhz-POP or alternatively less than a 50 per cent probability of our USD0.25 Mhz POP assumption being realised. This suggests there is upside in our view.”


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