* Iliad : Upgrade from Neutral to Outperform, TP EUR210
Iliad shares have shed 25% since the group announced its bid on T-Mobile US. However, in our view, the odds are now that the attempt will fail. This would bring instant relief on the stock and demonstrate that the group is financially disciplined. Conversely, if Iliad gets T-Mobile, the shares would fall in the short term and the equity story would be radically altered (becoming highly geared to US wireless) – but for us, a deal around USD34/share would not destroy value. In France, Iliad would benefit from an SFR-Bouygues tie-up (+EUR37/share). In the meantime, operational performance should not be amazing but not be bad either. Large risk but larger upside.