Overview
Raymond James has downgraded DigitalBridge Group Inc. (NYSE: DBRG) from Strong Buy to Underperform in response to the company’s announced agreement to be acquired by SoftBank for $16.00 per share in cash. At the time of the downgrade, DigitalBridge shares were trading at $15.41, just beneath the stated acquisition price.
Analyst view on the offer
The firm characterized the $16.00-per-share offer as "underwhelming" and said it sits at the lower bound of where the firm had expected a deal to land. Raymond James noted that, based on InvestingPro data, DigitalBridge carries a high price-to-earnings ratio of 143 and currently trades above its Fair Value estimate. The InvestingPro data and research products are cited as additional context for valuation and analyst coverage.
Market reaction and shareholder sentiment
Despite the downgrade, Raymond James observed that DigitalBridge’s shares have displayed notable momentum, rising 39% over the last six months and trading close to a 52-week high of $15.55. The analyst team also acknowledged that some early investors - specifically those who bought shares at prices below $7 in April 2025 - may view the deal favorably. However, the broader reaction from shareholders, according to the firm, is one of disappointment about the terms.
Competitive landscape and deal prospects
Raymond James stated that DigitalBridge was "very well-shopped" prior to the SoftBank agreement and said it does not expect a competing bid to surface for the digital infrastructure company. The firm anticipates that, despite pockets of shareholder pushback, the transaction will receive the necessary approvals and close in the second quarter of 2026.
Related broker commentary and transaction details
Other brokerages have adjusted ratings in light of the acquisition. Truist Securities lowered its view on DigitalBridge from Buy to Hold while keeping a price target of $16.00 per share, describing the acquisition valuation as fair but not fully reflective of the company’s longer-term prospects. RBC Capital also trimmed its rating from Outperform to Sector Perform and cut its target from $23.00 to $16.00.
SoftBank’s all-cash purchase values DigitalBridge at approximately $4.0 billion and is priced at $16.00 per share. The agreed price represents a 50% premium to DigitalBridge’s unaffected 52-week average price as of early December 2025.
Corporate moves tied to the transaction
Separately, WideOpenWest (WOW!) has completed a take-private process involving DigitalBridge Group, Inc. and Crestview Partners. Following that acquisition, WOW!’s common stock was delisted from public exchanges. The company has appointed Frank van der Post as Chief Executive Officer and named six additional senior executives as part of a significant leadership restructuring.
Implications
The sequence of downgrades from multiple brokerages centers on the market’s assessment that the agreed price, while representing a sizable premium to prior trading levels, does not fully capture what some analysts view as longer-term upside for DigitalBridge. At the same time, the expectation among analysts that the deal will be approved and completed in the second quarter of 2026 frames a relatively clear path forward for shareholders and counterparties.
Key points
- Raymond James downgraded DigitalBridge from Strong Buy to Underperform after SoftBank agreed to acquire the company for $16.00 per share in cash.
- DigitalBridge shares traded at $15.41, near a 52-week high of $15.55, and have risen 39% over the past six months.
- Other brokerages including Truist Securities and RBC Capital also lowered ratings or adjusted targets, with both setting $16.00 as the relevant valuation point.
Risks and uncertainties
- Shareholder dissatisfaction - While some early investors may be content with the $16.00 price, the broader shareholder base has expressed disappointment, which could trigger pushback during the approval process.
- Potential for no competing bids - Raymond James believes DigitalBridge was thoroughly marketed and does not expect alternative bidders, which could limit upside for shareholders seeking a higher acquisition price.
- Valuation debate - Analysts differ on whether the $16.00 offer fully reflects the company’s long-term potential, leaving uncertainty around future assessments of Fair Value and investor returns.
Tags: DigitalBridge, M&A, Finance, Telecom