Truist Downgrades DigitalBridge to Hold as SoftBank Offer Caps Upside

The downgrade by Truist to a Hold rating reflects a common pattern in M&A situations: once an acquisition is announced at an all-cash premium, the upside available to public shareholders is generally constrained to merger arbitrage around the offer price, and future “buy” ratings often convert to “hold” or “sector perform” unless there is clear potential for a higher bid or additional value beyond the headline price. [5]

Truist’s view is grounded in several facts: DBRG shares are trading nearly at the $16 per share acquisition offer, making material further gains unlikely under the deal’s terms. [5] The independent committee and board have unanimously approved the transaction, reducing prospects for counteroffers. [3][2] While recognizing the premium and strategic importance of DigitalBridge’s portfolio to SoftBank’s AI infrastructure ambitions, Truist argues that long-term optionality—e.g. carried interest, real estate/landbanks, future infrastructure build-outs—is not fully captured in the offer. [5]

On the strategic front, the deal grants SoftBank immediate entry into critical digital infrastructure, including data centers, fiber, cell towers, edge platforms, and access to significant power resources, to support its push into AI and what SoftBank frames as “Artificial Super Intelligence.” [3] From DigitalBridge’s side, being backed by SoftBank provides a capital base and scale possibly necessary for executing large infrastructure expansions that are capital-intensive, particularly with respect to data centers, power, and land. [3]

However, key risks remain. Regulatory approval is required, and the transaction is not expected to close until H2 2026. Delays or required divestitures could reduce value. Shareholder opposition is a possibility, particularly given that some analysts and law firms believe the $16 price may understate potential value, especially relative to peer multiples or projected earnings. [1search6] Also, Truist notes that beyond the $16 there is scarce upside under the current bid, making the investment more suitable for arbitrage-minded holders rather than growth investors. [5]

Comparatively, other analysts had previously valued DBRG at significantly higher levels. For example, RBC had a $23 target before adjusting down to the deal price; JPMorgan at one point saw $25-35 in potential depending on future earnings and expansion, especially in 2027. [4] Those views likely drove expectations, but the all-cash bid caps them unless a new bidder emerges. [2]