Cellnex Telecom S.A. is the leading operator of wireless telecommunications and broadcasting infrastructure in Europe. Cellnex operates in Spain, Italy, Netherlands, France, Switzerland, the United Kingdom and Ireland. It is a constituent of the IBEX 35, EuroStoxx 600 and MSCI Europe indices.
The 9 for 31 rights issue which represented an increase of c. 29% in Cellnex's share capital or 22.1% of the company's post-money market cap was partly used to finance its acquisition of Arqiva's telecoms division. The offering was fully underwritten by 14 syndicate banks (3 JGCs, 9 JBRs and 2 CLMs) and existing shareholders representing 35.8% of Cellnex's share capital also irrevocably committed to exercise their subscription rights.
Cellnex’s acquisition of Arqiva’s telecoms division and the launch of the rights issue were announced on 8th Oct and the prospectus was published on 9th Oct. Pricing of the rights issue represented a tight 19.58% discount to TERP (the tightest discount in a large European corporate rights issue in the last three years). During the subscription and rights trading period the share price went up by nearly 3% and the rights traded up by almost 14%. Only 31.27% of the rights excluding pre-commitments or 20% of the total rights were traded demonstrating solid shareholder support. The final take-up of the rights was 99.53% with the new shares being 38 times oversubscribed.
This very successful €2.5bn offering is the largest Spanish corporate ECM transaction in the last 5 years and the second largest equity offering in EMEA so far this year. It is the second capital increase by a major European corporate advised by STJ in the past six months following our advice to Infineon on its €1.55 billion ABB in June. Cellnex was awarded Corporate Issuer of the Year by International Financing Review for this deal.
STJ Advisors and AZ Capital advised Cellnex on key aspects of the offering, including negotiation of key terms of the underwriting agreement such as the no sub-underwriting clause, managing the bank risk concentration through an optimal syndicate (this offering involved 8 more banks than the company’s previous rights issue in March) and fee structure, providing complementary views on investor targeting, assisting on the documentation and monitoring the daily trading activities on the rights.