Sami Kassab of investment bank Exane/BNPP notified the investors, of AsiaSat going private which was termed not to be the best of decisions especially for the listed major satellite operators.
Kassab informed, “Carlyle and CITIC currently own 74 percent of AsiaSat and have jointly made an offer to take the company private citing poor share price liquidity and public listing costs. AsiaSat is a leading satellite operator in Asia with HK$1.4 billion (€163 million) of annual revenues and an 82 percent EBITDA margin. Sixty-five percent of its revenues are derived from Video and 35 percent from telecoms and broadband services. Twenty-five percent of its revenues are derived from China, 16 percent from Hong Kong and 59 percent from other Asian regions. It has seen headline revenue and EBITDA growth for the last three years including +6 percent headline revenue growth in 2018.”
This good news no longer seemed as good after Kassab crunched some numbers as well as the amount being paid to purchase minority shareholders.
“We estimate that Carlyle valuation of HK$10.22 per share (a 31 percent premium to the undisturbed share price) implies a trailing EV/EBITDA multiple of 5.1x,” said Kassab. “SES and Eutelsat currently trade on 9.6x and 7.0x trailing EV/EBITDA. Assuming our C-band valuation is fully captured in the current share price, we estimate that SES currently trades on 5.6x ex C-band with Eutelsat on 6.6x ex C-band. The low liquidity of Asiasat shares may partly explain the valuation gap. However this second take private (after Inmarsat’s) does not provide a positive valuation read-across for SES and Eutelsat’s [valuations].”