Makor - Special Situations - Bouygues Eur 27.55 tgt: 30-36
2014-11-03 08:15:20.874 GMT
What price for Bouygues Telecom? What discount for Bouygues
EN FP: Eur 27.55
October 31, 2014
With Iliad not closing on T-Mobile, the focus has returned to Bouygues and
Bouygues Telecom. We know that the French telecom sector is under significant
price pressure from too much competition (too many operators) and significant
capex outlays to come. Bouygues Telecom is the most vulnerable company in that
space, and a deal with another operator is in the works, particularly since the
French government seems to favor such outcome and a reduction of operators from
4 to 3. Iliad, and Orange are the potential bidders. Numericable, whose deal
with SFR just got approved might be overstretched to bid for Bouygues Telecom,
particularly given the high probability that Altice, Numericable's parent
company, might bid for Portugal Telecom. In our October 14 report, our
recommendation was not to rush into Bouygues, arguing there were better plays in
the Euro telecom space. Our recommendation remains the same – not to rush,
although between our last note and now, markets have rebounded, and with them
valuations thus increasing the relative valuation appeal for Bouygues Telecom.
FULL REPORT ATTACHED
Contributed via: Bloomberg Publisher WEB Service
Provider ID: cb4b5813ea2a4057b1d2b7f7c3c57663
-0- Nov/03/2014 08:15 GMT
2014-11-03 08:15:20.874 GMT
What price for Bouygues Telecom? What discount for Bouygues
EN FP: Eur 27.55
October 31, 2014
With Iliad not closing on T-Mobile, the focus has returned to Bouygues and
Bouygues Telecom. We know that the French telecom sector is under significant
price pressure from too much competition (too many operators) and significant
capex outlays to come. Bouygues Telecom is the most vulnerable company in that
space, and a deal with another operator is in the works, particularly since the
French government seems to favor such outcome and a reduction of operators from
4 to 3. Iliad, and Orange are the potential bidders. Numericable, whose deal
with SFR just got approved might be overstretched to bid for Bouygues Telecom,
particularly given the high probability that Altice, Numericable's parent
company, might bid for Portugal Telecom. In our October 14 report, our
recommendation was not to rush into Bouygues, arguing there were better plays in
the Euro telecom space. Our recommendation remains the same – not to rush,
although between our last note and now, markets have rebounded, and with them
valuations thus increasing the relative valuation appeal for Bouygues Telecom.
FULL REPORT ATTACHED
Contributed via: Bloomberg Publisher WEB Service
Provider ID: cb4b5813ea2a4057b1d2b7f7c3c57663
-0- Nov/03/2014 08:15 GMT