American Tower and Brookfield Asset Management have come together to table a bid for Cellnex, according to reports emanating from the Spanish press in recent days.

But while some seem convinced that such a mega-deal – we’re talking in the ball park of €50 billion – could go ahead, others insist that there’s nothing to see here. That massive price tag could get in the way, of course, or to put it another way, the companies would have their work cut out in reaching agreement on valuation. And there are potential regulatory issues across multiple markets to take into consideration.

Nonetheless, the media outlet that broke the news is sticking to its guns. It believes the various difficulties can be overcome to get the deal over the line.

Indeed, on Tuesday Okdiario, whose sources first shared the Cellnex buyout rumour late last week, cited a report from JP Morgan, which claims that while there would be reluctance to OK any deal on the part of national regulators, such reticence could be overcome.

The paper has seen a report from the investment bank that highlights American Tower and Cellnex’s overlapping towers footprints in certain European markets, but notes that the purchaser could easily sell off assets as a concession to the regulators in those markets, as has happened with other towers deals. Cellnex itself recently offloaded towers in the UK in order to gain regulatory approval for the final tranche of its €10 billion European towers deal with CK Hutchison, so such a move is hardly unprecedented.

JP Morgan’s analysts put Cellnex/America Tower’s combined market share at 39 percent in France and a sizeable 54 percent in Spain, but they still believe regulatory concessions would do the job.

However, others are less confident.

Reacting to the rumoured deal, Spain’s finanzas.com cited its own unnamed sources as saying that Cellnex is not working with Goldman Sachs to advise it on such a transaction, as claimed by Okdiario, and that there has been no buyout proposal from the American Tower/Brookfield partnership. Okdiario had also noted that American Tower/Brookfield are being advised by Morgan Stanley, incidentally.

Finanzas.com also quoted analysts from Jefferies and Bloomberg Intelligence as pointing to the antitrust issues that could arise in Germany, due to Brookfield’s involvement in Deutsche Telekom’s towers sale six months ago, and overlapping footprints in Sweden and the UK, as well as the aforementioned France and Spain.

The paper also addressed the thorny issue of cost. While its sources acknowledged that Cellnex would be a good strategic fit for American Tower, it would have to win over a diverse range of Cellnex shareholders who would likely be looking for a premium for their shares. It suggested shareholders would seek around €50 per share, compared with Cellnex’s current share price, which is just above the €36 mark.

Okdiario puts the value of Cellnex at up to €50 billion, including debt, which is a huge sum even for a company the size of American Tower, particularly given it has an eye on maintaining its investment grade rating, something Cellnex is also aiming to attain.

Indeed, even JP Morgan, which seemed to brush aside regulatory barriers, suggests that the gap in valuation between buyers and sellers would be wide. Surely that in itself casts the most doubt over the rumoured deal.

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