Yesterday, Bank Of America Merril Lynch released a report on American Tower Corp (NYSE:AMT) regarding its operations and growth ambitions. This is important for NII Holdings (NASDAQ:NIHD) shareholders, as it shows who the most aggressive bidder may be for NIHD's 4500 tower assets.
Here are some key excerpts:
International ambition remains
Today, 59% of the company's tower portfolio is located outside the US. Over the past several years, AMT has been very aggressive in expanding its portfolio into new regions in Latin America, Africa, India, and Western Europe. ... NIHD towers. NIHD has publicly announced its intention to sell approximately 4,500 of its ~7,000 towers in Mexico and Brazil to generate additional funds for its ongoing network build plans and deleveraging initiative. Given AMT's American Tower Corp. longstanding relationship with NIHD through its pre-existing presence in Mexico and Brazil, AMT would appear to be a logical acquirer of those assets. When asked about the NIHD towers, AMT noted that the company knows the portfolio well and that the towers are well-located/urban-based and of relatively good quality. NIHD has set a target date of mid 2013 to complete the sale and we would expect AMT to be a serious bidder, among others.
Given our previous bare bones valuation of $13.13 per share for NIHD, we think this particular development will add at least $4 per share to NIHD's balance sheet. This deal seems to be coming close to fruition. We therefore must reiterate our call to Google (NASDAQ:GOOG) to snap up NIHD in its entirety because it represents a one time opportunity for them to buy an extremely valuable footprint for wireless mobile computing in growing Latin America. Why? Because NIHD is a US company and the regulatory hurdles for foreign ownership of a wireless carrier have already been overcome. GOOG could not do this with any other large foreign wireless carrier anywhere in the world, let alone in the Americas. We think NIHD will appreciate significantly in the near future and are confident in Stephen Schindler and his enthusiastic mangement team.
Disclosure: I am long NIHD. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.