JTower said that the tender offer will be open until October 10
U.S. investment firm DigitalBridge Group is offering a 152% premium for Japanese tower company JTower in a deal that values the Asian telecom infrastructure company at around JPY93 billion ($630 million), according to a Bloomberg report.
JTower’s founder and president, Atsushi Tanaka, as well as Nippon Telegraph & Telephone (NTT) and its mobile unit, NTT Docomo, will tender their combined stake of roughly 26% to the take-private deal at JPY3,600 per share, according to an exchange filing. The offer runs from August 15 to October 10.
“In the Japanese telecommunications industry, in addition to the deployment of new communication technologies for Beyond 5G and 6G, the burden on telecommunications carriers is expected to continue to increase due to the expansion of the coverage area required not only for disaster response and rural areas on land, but also for the sky, sea, and outer space. In addition, as the population continues to decline, a major issue is how to maintain and operate communication infrastructure in a stable manner with limited human resources,” JTower said in a statement.
“In this context, there is a growing need to improve the efficiency of indoor and outdoor network development and the maintenance and operation of communication infrastructure through infrastructure sharing, and the company believes that the existence of infrastructure sharing business operators with sufficient systems and technical capabilities to take on this role is essential for the development of the telecommunications industry,” the company added.
JTower also said that its capital investment and system reinforcement in the indoor infrastructure sharing business and tower business, as well as initiatives to upgrade the sharing area, will require responding flexibly to future additional funding needs and making up-front investments from a long-term perspective.
However, the company noted that there is a possibility of restrictions on raising funds in the stock market due to share-price conditions, and the market has a strong tendency to prioritize short-term profitability, which makes it difficult to make up-front investments for future growth. Meanwhile, the company “has received representations from DigitalBridge that it is prepared to provide additional equity capital required to fully support the growth of the company after the company goes private through the tender offer, and through the tender offer, we expect that we will be able to raise funds for growth in an agile and stable manner from DigitalBridge. As a result, we will be able to respond flexibly to future additional funding needs and make up-front investments from a long-term perspective,” JTower added.
JTower also stated that it has decided to strengthen its management base by adding DigitalBridge as its new partner to contribute to the development of the Japanese telecommunications industry.
The firm affirmed that it will maintain its business alliance with existing capital and business alliance partners NTT, NTT Docomo and KDDI even after the consummation of the tender offer.
Florida-based DigitalBridge is an investment firm specializing in assets such as data centers and cell towers. In 2022, the company and Brookfield Asset Management had acquired a majority stake in Deutsche Telekom’s tower business.
