Digital Bridge Buyout Price Should Have Been Up To 25% Higher Per Share, Says Wells Fargo

Wells Fargo expects the deal between DigitalBridge and SoftBank to close as it sees no other competing bids emerging.

• The firm stated that DigitalBridge should have received up to $4 more per share from SoftBank.
• Analysts at TD Cowen downgraded the DBRG stock to ‘Hold’ from ‘Buy’ with a price target of $16.
• DigitalBridge received a double downgrade at RBC Capital, with the firm trimming its price target to $16 from $23, while downgrading the rating to ‘Sector Perform’ from ‘Outperform’.

SoftBank Group Corp.’s (SFTBY) acquisition price for DigitalBridge Group Inc. (DBRG) should have been higher by up to 25% per share, according to Wells Fargo analysts.

According to TheFly, the firm stated that DigitalBridge should have received up to $4 more per share from the Japanese investment firm. SoftBank announced the acquisition of DigitalBridge on Monday in a deal valued at $4 billion.

DigitalBridge shares were up 0.2% in Tuesday’s pre-market trade. Retail sentiment on Stocktwits around the company trended in the ‘extremely bullish’ territory at the time of writing.

Firm Expects Deal To Close

Wells Fargo expects the deal between DigitalBridge and SoftBank to close, as it sees no other competing bids.

“If no other attractive offers are out there, we can understand DBRG's rationale for accepting the $16 bid, even if it feels a little light to us,” the firm’s analysts said in the note.

SoftBank said on Monday that it will acquire all outstanding shares of DigitalBridge at $16 per share in cash, representing a 15% premium to DBRG’s closing price on December 26.

DBRG stock closed Monday with a 10% gain following the announcement. Wells Fargo has a $16 price target on DigitalBridge with an ‘Overweight’ rating.

Other Firms Downgrade DigitalBridge

Analysts at TD Cowen and RBC Capital also downgraded the DigitalBridge stock on Tuesday, according to TheFly.

Analysts at TD Cowen downgraded the DBRG stock to ‘Hold’ from ‘Buy’ with a price target of $16. DigitalBridge received a double downgrade at RBC Capital, with the firm trimming its price target to $16 from $23, while downgrading the rating to ‘Sector Perform’ from ‘Outperform’.

What Does DigitalBridge Do?

DigitalBridge owns, operates, and invests in businesses such as data centers, fiber, small cells, cell towers, and edge infrastructure.

Founded in 1991, the Florida-based company reported a revenue of $1.5 billion in 2023 and $607 million in 2024.

DBRG stock is up 35% year-to-date and 42% over the past 12 months.

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