Last week in telecoms: M&A developments at TIM, Forthnet, others boost TP stock index

The European telecoms sector had a positive week. The Telecompaper telecoms index rose by 1.1 percent during week 14, just shy of the EuroStoxx 50's gain of 1.4 percent. Satellite company Intelsat (+36%) and Greek challenger Forthnet (+18%), a takeover candidate, were the biggest winners. TIM (+11%) benefitted from an ongoing battle for its management, with CDP buying a 5 percent stake and Elliott raising its stake to 10 percent.

Other satellite companies were to be found in Intelsat's slipstream: Eutelsat (+8.1%), Iridium (+4.1%) and SES (+6.0%), the latter reported that it now has over 1 billion viewers. Sky's (+1.4%) takeover by Fox appeared to be one step closer after Disney offered to buy Sky News to settle worries over media plurality in the UK market.

The biggest losers in the sector were Norwegian NextGenTel (-8.4%), Swisscom (-4.8%) and Orange Belgium (-6.6%). The latter lost a large part of the gain of the previous week, after the takeover candidate Voo made known that the company is not for sale. In the UK a 5G spectrum auction ended with Telefonica's (+1.4%) O2 UK taking a majority of the spectrum. BT (+3.1%) and Vodafone (5.0%) picked up 5G spectrum, as did CK Hutchison's (-2.6%) 3 UK.

Year-to-date: KPN weakest incumbent

Year-to-date, our telecoms index (-5.4%) and the EuroStoxx 50 index (-2.7%) improved their performances, but remained in negative territory. Intelsat (+51%) took the lead from MasMovil (+38%). At the bottom, Veon (-33%), CityFibre (-30%) and Inmarsat (-27%) are still this year's worst performers.

Among the incumbents, TDC (+31%) leads as the takeover bid from Macquarie et al moved ahead. TIM (+19%) is the runner-up, followed by Finnish DNA (+13%) and Elisa (+16%). KPN (-16%) is the weakest among the incumbents, followed by BT (-14%) and Swisscom (-13%).