Monday , 18 March 2019
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Last week in telecoms: Inmarsat approached for a takeover and BT is up for a CEO change

Last week in telecoms: Inmarsat approached for a takeover and BT is up for a CEO change

Last week’s strongest stocks in the European telecoms sector included satellite firm Inmarsat, subject of a takeover rumour, and Romanian challenger Digi, launching a share buy-back program. Quite a few stocks in our basket have attracted bids: TDC, Com Hem, CityFibre, Sky – and no doubt more will follow. The sector and the market i.c. the EuroStoxx 50 index ended week 23 down slightly, though (-0.2%).

Near the close of the week Inmarsat (+19%) was forced to make a public statement after having been approached by EchoStar, eager to launch an offer. Inmarsat pushed EchoStar’s unknown offer price aside, claiming it grossly undervalued Inmarsat. Digi (+15%) initiated the share buy-buy program it had announced before. And Altice (6.9%) extended its rally following the Altice USA spin-off.

Italy: digesting Iliad’s entry?

Negative performances were to be found in Italy, possibly showing that investors are still digesting Iliad’s recent entry into the mobile market. TIM (-4.0%) was also in the news over the functional separation of its fixed access network, which may be concluded early next year. Vodafone (-3.8%), with significant exposure to the Italian market, was also down, as were microcaps Tiscali (-5.6%) and Go Internet (-3.6%).

UK: CEO change at BT

Major news came from BT (-0.6%), giving in to shareholder pressure to replace its CEO Gavin Patterson. Its smaller peer from Hull, KCOM (+0.8%), reported on its fourth quarter and Fox received conditional approval for its takeover of Sky (+0.2%).

YTD: telecoms sector underperforming

Year-to-date, our Eurpean telecoms index is down 7.8 percent, underperforming the EuroStoxx 50 index (-1.6%). Intelsat (+391%) still leads, nearly quintupling its share price. Altice (+154%) is also doing extremely well. MasMovil (+35%) may feel the benefit of having acquired 5G spectrum on the cheap. Iridium (+34%) could develop into a satellite broadband play.

Apart from stocks subject to takeover offers, three Nordic incumbents are doing particularly well: Telia (+16%), Elisa (+19%) and DNA (+28%). The heavyweights, Vodafone and Deutsche Telekom (-9.9%) are holding our index back. And so do most of the larger incumbents, including BT (-25%) and Telefonica (-6.8%).

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