Wells says SoftBank would need at least $18-$20/share offer to buy DigitalBridge

Commenting on the news report saying SoftBank Group (SFTBY) is in talks to acquire Outperform-rated DigitalBridge (DBRG), Wells Fargo says the firm’s initial reaction is that an offer would have to be in the $18-$20-plus range/share to consummate a deal. At an $18-$20 range, this would imply about 16-18 times Fee-Related Earnings after accounting for the Net Present Value of future carry and GP ownership stakes. It’s also possible the promote could be valued at a much higher value given the size and growth potential of DigitalBridge’s data center platforms, Wells adds. The firm further notes SoftBank has an “obvious reputation” for paying handsomely for assets, so a valuation well in excess of $20/share is certainly possible. Given the challenges DigitalBridge has had in attracting public investor attention as a sub-scale asset management firm, Wells imagines management would be willing sellers at greater than $18/share.