Telenor: Jefferies still 'hold' after DNA deal

(CercleFinance.com) - Jefferies maintains its "hold" rating and 163-Norwegian kronor target price on the Telenor share after the Norwegian telecom firm bought a controlling stake in Finland's DNA.


This is a "clean trade" buy at a 7% premium to market, as DNA is trading at about 10.2x 2019 EV/EBITDA, while the deal valuation is at 10.8x, the broker said.

"This looks like a fairly full valuation at first sight but we do note DNA's strong growth profile (...) in a healthy market (...," it added.

That said, as a mitigating factor on the valuation, cost synergies are relatively limited, Jefferies wrote.

"In other words, the deal looks more like the pursuit of a pan-Nordic strategic agenda," it noted.

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