Advanced Television

Hispasat sale “positive” for SES, Intelsat, Eutelsat

February 14, 2019

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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