The Telecompaper Stock Index European Telecoms Services was up 1.8 percent in week 27, narrowly beating the EuroStoxx 50 index (+1.6%). Ahead of the Q2 earnings season the news flow was mainly limited to a number of mergers progressing. A diverse set of shares made the biggest gains: Greek challenger Forthnet (+16%), German cableco Tele Columbus (+13%), satellite operator Intelsat (+9.9%) and Spanish convergence operator MasMovil (+8.7%). Forthnet, a penny stock, is closing in on doubling its share price year to date. Tele Columbus is making a remarkable recovery.
Mergers progressing
Vodafone (+4.1% for the week) buying into TIM's (+3.4%) tower company Inwit (+3.1%) was coming close to finalisation. If rumours are true, Forthnet (+16%) could finally have found a bidder. KCom (+2.0%) was left without any of the two consortia interested making a formal offer, leading the UK Takeover Panel to arrange an auction starting July 7. USSL indicated that it would offer 97 pence and was trumped by Macquarie, bidding 108 pence. Last week's closing of 114 pence suggests that the market expects the bidding to go even higher.
Equinix partnered with GIC to establish a USD 1 billion joint venture for building hyperscale data centres. The international satellite operators potentially holding valuable US 5G spectrum once more told the FCC how they would transfer these assets to the mobile industry. Others, including Charter, presented an alternative plan.
YTD
Year to date, Forthnet leads with a 95 percent gain, followed by Altice Europe (+84%), Intred (+61%) and KCom (+56%). The bottom four are still all to be found in Germany: 1&1 Drillisch (-32%), Tele Columbus (-31%), Telefonica Deutschland (-27%) and United Internet (-24%). Tele Columbus showed a remarkable recovery over the past few weeks, coming from a year to date loss of 54 percent just five weeks ago. Put differently, the stock is up 49 percent over the same period.
