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MÁSMÓVIL: KKR AND CINVEN MAKE TOB AT € 22.50/SH. (ANÁLISIS BANCO SABADELL)

 The venture capital funds KKR, Cinven and Providence (the latter a shareholder in MAS with a 9.1% stake) have made a friendly TOB on the company at € 22.50/sh. (+20.2% vs. Friday’s closing price, +30.3% over the average price over the past month and -10% vs. our T.P.) with the aim of delisting it.
 The bid’s effectiveness is subject to the acceptance of 50% of MAS’s shareholding. In this regard, the funds have announced that they already have approval from shareholders representing 29.56% of the capital (Onchena with 13.2%, Key Wolf 5.03%, Inverady 2.09%, Estiriac 0.08% and Providence with 9.1%).
 MAS’s Board of Directors admits that it welcomes the Bid and its Price, believing that it is an opportunity to create value for shareholders. Separately, the funds acquiring the company have shown total confidence in MAS’s current strategy, business project and history of success.
 This news highlights the current undervaluation of MAS, which is trading below peer levels (EV/EBITDA’21e of 6.1x and EV/Op. CF’22e of 10.9x vs. 6.8x and 12.73x for peers, respectively), despite offering a unique growth proposal above the sector (CAGR’19-22e of +15.8% in EBITDA vs. around +3% sector). With this in mind, the bid should be raised (it is still below our T.P.), or there could even be a counter-bid, as suggested by he press (CVC has been mentioned, but a counter-bid could also come from Orange or Vodafone, awaiting approval from the regulator). Following Euskaltel’s nationwide plan, the fact there are 5 operators could make approval easier. Separately, we would still need to wait to see if the Spanish Govt. decides to possibly veto the move, as the sector is strategic. The stock is already trading +2% above the bid presented today.
 As for the impact on the rest of the sector, this move could be seen as a bet on consolidation in Spain, and in this regard, we stress the positive reaction of Euskaltel (T.P. € 8.50/sh., +18.9% upside) that is climbing +10%, as it could be regarded as a target of the consolidation process. For Telefónica (T.P. € 8.50/sh., +93% upside), this deal is also positive (it is rising today +4.4%), as it would also benefit from lower competition in the event of a consolidation scenario.
 ACS, which holds a ~3% stake, would receive € 90 M (2% of NFD and 0.5% of EV), and the impact on the valuation would be quite small (+0.3%).