Google Should Buy NII Holdings Before Tower Sale Is Done
by Tufenk
NII Holdings (NIHD) released earnings last week. Short sellers are still attacking the stock based on their belief that EBITDA was below expectations. Three analysts don't agree. More on this later. This could be a very fortunate set of circumstances for cash rich acquisitive companies interested in mobile computing's future. What is important is that the company was very open on the intent and process of selling 4500 towers out of its portfolio of 9000 towers. We think this a perfect fit especially for Google (GOOG). Why? Because GOOG could pay a premium for NIHD at today's $6.77 price starting, for instance, with a $3.50 premium and settling at the low end of the range of today's analyst price targets if necessary. NIHD could reliably get a fairness opinion for a price close to its price target on the street. GOOG would get a large footprint in Mexico, Brazil, Chile, Argentina, which strategically fits its Android and Google Fiber platform initiatives. Moreover, with GOOG's extremely low cost of capital from the markets, GOOG can refinance NIHD's debt at a rate that brings the company to cash flow neutral from operations immediately. Let's assume for the moment that GOOG can get the same rates as Apple (AAPL) did on its recent offering for a ten year note: read more »
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