Last week in telecoms: Vodafone and Telenor receive approval for takeovers, as earnings season kicks off

Nieuws Algemeen Europa 22 JUL 2019
Last week in telecoms: Vodafone and Telenor receive approval for takeovers, as earnings season kicks off

A number of mergers and investments, as well as Q2's first earnings reports, set the tone in the telecoms sector last week. The winners included Turk Telekom (+5.8%), Rostelecom (+5.5%), Intelsat (+5.4%) and Altice Europe (+5.4%). That could however not prevent the Telecompaper Stock Index European Telecoms Service ending week 29 down 1.4 percent, lagging the EuropStoxx 50 (-0.5%). Several German shares were the biggest losers, including 1&1 Drillisch (-13%), United Internet (-10%) and Tele Columbus (-7.7%).

M&A

Vodafone (-1.8% for the week) received approval for its takeover of Liberty Global (+1.8%) units in Germany and Eastern Europe. Telenor (-2.8%) was allowed to take a majority stake in Finnish DNA (-0.1%).

Divestments were conducted by BT (-1.6%), selling its London headquarters, and DNA, selling its DTT unit. OTE (-0.8%) announced a special dividend after the sale of its Albanian subsidiary. Altice Europe (+5.4%) was reported to be struggling to find a buyer for its Portuguese fibre network. Telecom Italia (TIM, -2.0%), according to reports, was considering asset sales worth up to EUR 2 billion.

Earnings reports were published by:

In the year-to-date view, we notice a couple of things:

  • Several German shares are suffering most, of all European telecoms stocks, notably 1&1 Drillisch (-40%), Tele Columbus (-38%), Telefonica Deutschland (-35%) and United Internet (-32%).
  • A number of takeover candidates unsurprisingly perform well, including Greek Forthnet (+107%), KCom (+64%), Zayo Group (+47%), Italian Go Internet (+43%) and DNA (+23%). KPN (+2.3%) is falling behind in this list, suggesting mounting doubts over the possibility of an offer for the company.
  • BT is by far the weakest incumbent, down 21 percent since the end of 2018. Turk Telekom is the strongest, up 44 percent.
  • All infrastructure shares (fibre, towers, data centres) in our index are up YTD.

Categories:

Algemeen

Companies:

Elisa,  KPN,  Tele2,  Telenor,  Telia,  Vodafone,  Drillisch,  Kcom,  Digi,  OTE,  Telecom Italia,  Turk Telekom,  DNA,  Forthnet,  Intelsat

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Europa

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