Telenor Sells 30% Stake in Norwegian Fiber Company

Telenor announced it is selling a 30% stake in its Norwegian fiber infrastructure company at an enterprise value of NOK 36.1 billion. Telenor joins the wave of infrastructure carve-outs that we have seen among telecom firms in recent years, including Telefonica, Deutsche Telekom, and Telecom Italia, among others. The sale price represents an enterprise value/EBITDA ratio of 21 times, in line with other fiber transactions like Telefonica’s fiber sales in Chile and Colombia in the last year. The net proceeds for Telenor will be NOK 10.8 billion, and the company intends to use 30% of it (NOK 3.2 billion) for share buybacks, something we believe is accretive given the shares are trading 30% below our fair value estimate of NOK 147. We support this decision as minority infrastructure sales allow telecom companies to crystallize the value of their assets while maintaining operational control. We maintain our fair value estimate for Telenor.