Communications

Report by New Street Research

New Street expects to see an uptick in M&A activity this year after a lull in 2024. Some of the larger transactions are likely to be potential attempts at further 4-3 deals following the successful approvals in Spain and the UK. Key markets where this could happen are Germany, Italy, France, Sweden and Denmark. From an investor perspective, the best way to play this theme would be through Telefonica, 1&1, Telecom Italia, Altice France bonds or Bouygues. Away from potential 4-3 mergers, other fiber deals could still be a further theme in Europe in 2025, and again Telecom Italia comes into focus as a beneficiary of a potential NetCo-OpenFiber transaction.

Communications

Report by New Street Research

New Street explores the left-field idea that launching a full takeover of BT could actually help Drahi to increase his liquidity as one option to help support the deleveraging of Altice France by over 1x. They believe that legitimate concerns that Drahi could be a forced seller of his BT shares are acting as an overhang on the stock. While New Street aren’t in any way downplaying the strong opposition and complexity surrounding an offer for BT, they think the maths could just work, so there is the potential that Drahi could surprise the market and attempt to launch a full offer when his current 6-month standstill agreement expires in Nov, as it could raise c.£2.5-3.5bn of additional liquidity.

Health Care

Report by 280First

LSFT's executive employment agreements contained severance and change in control policies. It seems that the new policy contains more benefits under Change in Control. Executive employment agreements were last amended in May and June of 2020. The new policy does not seem to be a routine update. As there are always reasons why companies elect to take any action, is this new policy prompted by external takeover interests? Other key findings from 280first's Q2 22 10Q and 10K filings analysis included Altice USA (ATUS), Microstrategy Incorporated (MSTR) and Enphase Energy (ENPH).

Technology

Report by BWS Financial

Priced for perfection despite signs of growth waning - overly bullish management forecasts to leave investors disappointed. CALX has benefitted from an increase in broadband service providers adopting its software solutions during a time when people were staying at home, but those trends are now changing. Comcast and Altice USA have both recently reported a decline in broadband subscribers and Hamed Khorsand believes CALX’s customer concentration towards smaller providers makes it prone to even greater volatility with orders. 12-month TP $13 (75% downside).