European Event-Driven Analyst

Jesus Rodriguez Aguilar

Event-Driven

<ul>
<li>The public holding company SEPI, controlled by the Spanish Treasury, has confirmed to the CNMV that it is studying the possibility of acquiring a stake in <a href="https://www.smartkarma.com/entities/telefonica-sa" target="_blank" data-smartkarma-citation="entities:21299:1" rel="noopener">Telefonica SA (TEF SM).</a>
</li>
<li>Market speculates with a 5% stake to counterbalance the current 4.9% stake of STC (which could execute an option to acquire another 5% pending Government authorisation).</li>
<li>At current market prices, it is equivalent to 22.04 trading sessions. Q3 results and Capital Markets Day, the first major strategic update in years, will take place on 8 November. </li>
</ul>


The public holding company SEPI, controlled by the Spanish Treasury, has confirmed to the CNMV that it is studying the possibility of acquiring a stake in Telefonica SA (TEF SM).

Market speculates with a 5% stake to counterbalance the current 4.9% stake of STC (which could execute an option to acquire another 5% pending Government authorisation).
At current market prices, it is equivalent to 22.04 trading sessions. Q3 results and Capital Markets Day, the first major strategic update in years, will take place on 8 November. 


SPAC Deep Dive, subSPAC

subSPAC

SPAC Deep Dive

Each week we’ll identify and break down for you SPACs that are capturing market share and making an impact.

Equity Bottom-Up

<ul><li>Elon Musk's Starlink recently <a href="https://techcrunch.com/2022/08/25/t-mobile-phones-will-connect-to-starlink-for-free-starting-next-year/" target="_blank" rel="noopener">announced plans</a> to enter the global carrier market, spooking shareholders of space-based cellular operator AST SpaceMobile.</li><li>AST, which went public through a SPAC in 2021, has plans to commercialise global space based telecommunications, but has notably struggled due to technical challenges.</li><li>AST Shareholders have feared that the Starlink announcement risked overshadowing the company’s upcoming launch and also possibly beat the company to market, despite the latter having a significant head start.</li></ul>

Elon Musk's Starlink recently announced plans to enter the global carrier market, spooking shareholders of space-based cellular operator AST SpaceMobile.AST, which went public through a SPAC in 2021, has plans to commercialise global space based telecommunications, but has notably struggled due to technical challenges.AST Shareholders have feared that the Starlink announcement risked overshadowing the company’s upcoming launch and also possibly beat the company to market, despite the latter having a significant head start.

AST SpaceMobile Vs Starlink: The Race for Global Connectivity

<ul>
<li>The acceptance period runs until 2 September. HAL now controls 52.9% of Boskalis (Stichting Hyacinth will presumably keep buying at €32 or less). HAL will consolidate Boskalis from H2 2022.</li>
<li>The Boards of Boskalis have concluded that the offer price is not sufficiently convincing to recommend it to Boskalis' shareholders. Good try, but twisting HAL's arm seems difficult. Premium is 0.06%.</li>
<li>Considering the precedent of Orange/Orange Belgium, I would only open a position below the offer price. HAL will now consolidate Boskalis and does not need to sweeten the offer.</li>
</ul>


The acceptance period runs until 2 September. HAL now controls 52.9% of Boskalis (Stichting Hyacinth will presumably keep buying at €32 or less). HAL will consolidate Boskalis from H2 2022.
The Boards of Boskalis have concluded that the offer price is not sufficiently convincing to recommend it to Boskalis' shareholders. Good try, but twisting HAL's arm seems difficult. Premium is 0.06%.
Considering the precedent of Orange/Orange Belgium, I would only open a position below the offer price. HAL will now consolidate Boskalis and does not need to sweeten the offer.


HAL Holding/​Royal Boskalis Westminster: Offer Launch & Precedent of Orange/Orange Belgium

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Last Week in Event SPACE:  Swire, Hitachi Metal, Jardine, Softbank, Bingo, Japan Asia, Mainstream

On 27 April, <a href="https://www.smartkarma.com/entities/orange-sa" target="_blank" data-smartkarma-citation="entities:21522:1" rel="noopener">Orange SA (ORA FP)</a> published the results of its offer for <a href="https://www.smartkarma.com/entities/orange-belgium-sa" target="_blank" data-smartkarma-citation="entities:21340:1" rel="noopener">Orange Belgium SA (MOBB EU)</a>. It now holds a 74.68% stake.
Orange has decided to re-open the tender for five trading days (28 April to 4 May inclusive, offer price unchanged) with the aim of gaining more acceptances.
Orange Belgium closed at €22.25 on 27 April, a 1.8% higher vs. the prior trading session and 1.1% above Orange's re-opened offer. The shares are inexpensive, trading at 5.2x EV/Fwd EBITDA (vs. 5.96x for peers), and offer a 9.3% 21e EFCF yield.
Its seems difficult that Orange will gain any more offer acceptances and as per Polygon's statement, it is far from being able to squeeze-out and delist. In the absence of any negotiations about bumping the offer price, TP lowered to €26.6, in line with peers' median EV/Fwd EBITDA. Reiterate long.
Risks: lower liquidity for the shares (I estimate c. €1 mn daily), lower revenues from higher competition and/or rising wholesale cable costs, higher capex investments than expected (Orange has not made clear whether they will be with a FTTH partner or will seek to acquire a cable company), entrance of a fourth mobile operator.

On 27 April, Orange SA (ORA FP) published the results of its offer for Orange Belgium SA (MOBB EU). It now holds a 74.68% stake.
Orange has decided to re-open the tender for five trading days (28 April to 4 May inclusive, offer price unchanged) with the aim of gaining more acceptances.
Orange Belgium closed at €22.25 on 27 April, a 1.8% higher vs. the prior trading session and 1.1% above Orange's re-opened offer. The shares are inexpensive, trading at 5.2x EV/Fwd EBITDA (vs. 5.96x for peers), and offer a 9.3% 21e EFCF yield.
Its seems difficult that Orange will gain any more offer acceptances and as per Polygon's statement, it is far from being able to squeeze-out and delist. In the absence of any negotiations about bumping the offer price, TP lowered to €26.6, in line with peers' median EV/Fwd EBITDA. Reiterate long.
Risks: lower liquidity for the shares (I estimate c. €1 mn daily), lower revenues from higher competition and/or rising wholesale cable costs, higher capex investments than expected (Orange has not made clear whether they will be with a FTTH partner or will seek to acquire a cable company), entrance of a fourth mobile operator.

France

Orange SA provides telecommunications services to residential, professional, and large business customers. The Company offers public fixed-line telephone, leased lines and data transmission, mobile telecommunications, cable television, Internet and wireless applications, and broadcasting services, and telecommunications equipment sales and rentals.

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Orange SA (ORA FP)

Back in Telefonica

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Jesus Rodriguez Aguilar

AST SpaceMobile Vs Starlink: The Race for Global Connectivity

Elon Musk's Starlink recently announced plans to enter the global carrier market, spooking shareholders of space-based cellular operator AST...

subSPAC

HAL Holding/Royal Boskalis Westminster: Offer Launch & Precedent of Orange/Orange Belgium

This situation is similar to that of Orange/Orange Belgium, and there are grounds to believe that HAL will not sweeten the offer price. I would...

Jesus Rodriguez Aguilar

Last Week in Event SPACE: Swire, Hitachi Metal, Jardine, Softbank, Bingo, Japan Asia, Mainstream

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

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Orange/Orange Belgium: Offer Re-Opening

The shares are inexpensive (5.2x EV/Fwd EBITDA), and offer a 9.3% 21e EFCF yield. In the absence of further negotiations about offer price, TP...

Jesus Rodriguez Aguilar

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Back in Telefonica

​SEPI, the Spanish Treasury's public holding company, is considering buying a stake in Telefonica SA, possibly around 5% to gain a seat in the...

Jesus Rodriguez Aguilar

AST SpaceMobile Vs Starlink: The Race for Global Connectivity

Elon Musk's Starlink recently announced plans to enter the global carrier market, spooking shareholders of space-based cellular operator AST...

subSPAC

HAL Holding/​Royal Boskalis Westminster: Offer Launch & Precedent of Orange/Orange Belgium

This situation is similar to that of Orange/Orange Belgium, and there are grounds to believe that HAL will not sweeten the offer price. I would...

Jesus Rodriguez Aguilar

Last Week in Event SPACE: Swire, Hitachi Metal, Jardine, Softbank, Bingo, Japan Asia, Mainstream

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

Orange/Orange Belgium: Offer Re-Opening

The shares are inexpensive (5.2x EV/Fwd EBITDA), and offer a 9.3% 21e EFCF yield. In the absence of further negotiations about offer price, TP...

Jesus Rodriguez Aguilar

SEPI, the Spanish Treasury's public holding company, is considering buying a stake in Telefonica SA, possibly around 5% to gain a seat in the...

HAL Holding/Royal Boskalis Westminster: Offer Launch & Precedent of Orange/Orange Belgium