Strong takeover signal refills Cellnex’s war chest

LONDON: Cellnex Telecom’s refilled M&A war chest can press home its first-mover advantage. The Spanish mobile mast company on Wednesday announced it was raising 4 billion euros from investors to fund potential 11 billion euros in purchases. With more towers coming to market and competition intensifying, it makes sense for Chief Executive Tobias Martinez to act swiftly.

Having only recently finished one acquisition spree, Martinez is mad keen on another. The structural shifts which propelled Cellnex to become Europe’s biggest independent mobile tower operator since it was spun off from Abertis in 2015 remain in place. Telecoms groups which need to invest in 5G networks can raise capital and lower costs by selling the towers which host their transmitters and leasing them back. The more towers Cellnex buys, the lower its average running costs. The $25 billion company’s EBITDA margin has widened by 7 percentage points to a staggering 74% over the last two years.