DB Pyramid Holdings, LLC, a U.S. corporation under DigitalBridge Group (NYSE: DBRG), announced that it will acquire tower company Jtower Corporation’s (TYO: 4485) common stock through a tender offer under guidelines set by Japan’s Financial Instruments and Exchange Act. The DigitalBridge unit is offering a 152 percent premium for Jtower in a deal that values the Tokyo-based telecom infrastructure-sharing company at around $630 million, Bloomberg reported.
Jtower and Nippon Telegraph and Telephone Corporation (NTT; TYO: 9432), Japan’s largest mobile network operator, according to Inside Towers Intelligence, say they will continue the business alliance that has been in place since July 4, 2019, to promote the infrastructure sharing model in the era of 5G mobile communications systems. As of June 30, Jtower operated more than 6,700 towers that it offers infrastructure sharing among Japan’s four mobile network operators – NTT, KDDI (OTCM: KDDIY), Softbank Mobile (OTCM: SFBQF) and Rakuten (TYO: 4755). In addition to carving out, (read, acquiring), existing towers from MNOs in heavily populated areas, the company is building and promoting new tower sharing in rural areas.
In addition, Jtower offers in-building solutions (IBS) that support multi-MNO service over a common platform inside large buildings. At the end of March, the company reported that it had its IBS operational in 589 buildings in Japan and 243 buildings outside of Japan.
The potential is significant for Jtower to expand its tower portfolio and offer shared infrastructure services to a greater degree to its MNO tenants. The company says it has in place master transaction agreements with NTT for tower carve-outs from NTT West, NTT East and NTT DoCoMo and is in the process of transferring 7,761 towers with more carve-outs planned. Note that Japan has around 220,000 towers, according to TowerXchange but nearly 96 percent of those are still owned and operated by the MNOs like NTT and KDDI.
Jtower’s founder and president, Atsushi Tanaka, as well as NTT and its mobile unit will tender their combined stake of roughly 26 percent to the take-private deal at $24.48 per share, according to an exchange filing. Jtower’s board of directors supports the tender offer and is recommending that other shareholders tender their shares. DB Pyramid Holdings’ offer runs from today, August 15, to October 10.
By John Celentano, Inside Towers Business Editor
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