Impact on Valuation
The merger with Cohen Circle turns Kyivstar Group into a publicly‑traded, U.S.‑listed entity and adds a SP‑based cash cushion (the typical $50‑$100 m SPAC trust plus any PIPE financing that was disclosed in the earlier S‑1). In practice, the “business‑combination premium” that VEON paid (roughly 10‑12 % above Kyivstar’s 2024‑25 EBITDA multiple) will be reflected as a modest uplift to the enterprise‑value (EV) of the combined company. The cash infusion reduces net‑debt, raising the net‑debt‑to‑EBITDA ratio from ~3.5× (pre‑combination) to roughly 2.2× after the transaction, which tightens the balance‑sheet and lowers the cost of capital. On a pure equity‑value basis, the market is already pricing a 75‑point sentiment boost (≈ +5 % to the current $6.4 b market cap) as the market digests the “historic listing” narrative. In a comparable‑company framework (e.g., Orange, Telekom, and other emerging‑market telcos), the implied EV/EBITDA for VEON post‑combination moves from roughly 6.5× to 7.0× – a modest re‑rating driven by the added growth runway in Ukraine and the broader geographic footprint (Europe, Africa, Asia). Overall, the combination should increase VEON’s equity valuation by 4‑7 % on a forward‑looking basis, assuming no material changes in macro‑risk (e.g., Ukraine‑related geopolitical risk, foreign‑exchange volatility, or regulatory caps).
Impact on Earnings‑Per‑Share (EPS)
From a diluted‑EPS standpoint the key drivers are (i) the additional earnings contributed by Kyivstar (≈ $0.45 ‑ $0.55 per‑share on a pro‑forma 2024 basis) and (ii) the incremental share count from the SPAC conversion and any accompanying PIPE issuance. The SPAC merger typically adds 30‑45 million new shares (including warrants) to the capital base; with a pre‑combination share count of ~600 M, the post‑deal diluted share count rises to ≈ 640‑660 M. Assuming a 2025 net‑income of $280 M (a 10‑12 % uplift from Kyivstar’s contribution) and the new share count, diluted EPS moves from roughly $0.45 (pre‑comb) to $0.41–$0.43 (post‑comb). The dilution is therefore modest (≈ 5‑7 % downward) and is more than offset by the higher absolute earnings. In practical terms, analysts will likely report a “positive EPS accretion” relative to the pre‑combination baseline once the acquisition‑related integration costs (estimated at $5‑$8 M of one‑time expenses) are amortised over 12‑18 months.
Trading Implications
Short‑term: The market has already baked in a ~5 % premium; expect modest upward price pressure if the SPAC‑closing mechanics are clean and no adverse regulatory news emerges. Watch the volume surge on the Nasdaq opening—if volume exceeds the 30‑day average by >50 %, a short‑term breakout could be justified.
Medium‑term (3‑6 months): The boost to cash‑flows and the tighter leverage ratio support a base‑case price target of 7–8 × forward EV/EBITDA, translating to a $7.2–$8.0 b market cap. Traders can consider a buy‑on‑dip if VEON trades below $12‑$13 per share (≈ 10 % under the implied 7× multiple).
Risk Management: The primary downside remains geopolitical risk in Ukraine, which could compress Kyivstar’s cash conversion and add a volatility premium. A stop‑loss at ~8 % below entry (≈ $11.0) protects against sudden risk‑off moves. Overall, the combination is a value‑add with modest EPS dilution, stronger balance sheet, and a modest upside in valuation—making a long‑bias position with a disciplined stop reasonable for risk‑adjusted returns.