Prysmian shares fall as the market gives a lukewarm reception to the deal with Atkore

(Il Sole 24 Ore Radiocor) - The market gave a lukewarm reception to the announcement of the acquisition by Prysmian of the US firm Atkore for $95 per share. The share price of the cable manufacturer, which initially opened higher, soon turned lower.

Specifically, under the terms of the transaction, the company’s implied enterprise value is approximately $3.8 billion, representing a premium of approximately 23 per cent compared with the volume-weighted average price over the 90 days preceding Friday 31 July 2026, and approximately 30 per cent compared with Friday’s closing price. Based on the pro forma combined results for the 2025 financial year, the combined group would have generated net revenue of approximately €22.1 billion and adjusted EBITDA of approximately €2.7 billion. Prysmian therefore expects to generate pre-tax synergies at full run-in of approximately $150 million within three years of the transaction’s completion (expected by the end of 2026). It is estimated that this will lead to an increase in earnings per share in the high single-digit percentage range in the first full financial year following the closing, before synergies, and in the double-digit range once the synergies are fully realised.

Analysts are in agreement in their positive assessment of the deal, particularly in view of the expected synergies and the multiple paid. “The transaction significantly expands Prysmian’s presence in North America and accelerates the Group’s transformation from a cable manufacturer to an integrated provider of solutions for electrical infrastructure” emphasises Equita, which highlights the “significant synergies” at both the commercial and cost levels. “The acquisition is in line with Prysmian’s strategy to expand into adjacent sectors to offer a broader portfolio of products and solutions, with a particular focus on North America and long-term growth trends, including data centres and public utilities” notes Banca Akros. The fact that Atkore operates in a business adjacent to that of cables (in particular, it produces electrical conduits that complement cables, such as steel, PVC and aluminium conduits that protect electrical cables) also implies “limited antitrust risks”, add the experts at Intermonte.

Despite the favourable assessments from analysts, however, the market is holding back to see how the deal will be financed. During this morning’s conference call, management specified that the acquisition will be financed for around 60 per cent through debt, a further 20 per cent, or slightly more, will be covered by hybrid debt, whilst the remaining 20 per cent will be covered by equity, which could take the form of a new share issue or the sale of shares held by the company’s treasury. This increase in the free float does not appear to have been well received by investors.

Management’s reassurances are not enough. As Prysmian’s CFO, Pier Francesco Facchini, the equity component – even through the use of a convertible instrument – will be ‘rather limited’ and, if converted into shares at current stock market prices, will amount to just 2 per cent or so of Prysmian’s share capital. As for the portion financed through hybrid debt – 50 per cent of which is treated as equity by the rating agencies – the CFO went on to emphasise that it “will strengthen the equity component for credit rating purposes, without, however, producing dilutive effects”. The company also highlighted that the structure of the financing is “fully consistent” with maintaining Prysmian’s current investment-grade rating, the outlook for which has recently been upgraded to positive.