Deutsche Bank Comments on AT&T's (T) Rumored Offer for Telefónica (TEF)
Tweet
Share
E-mailGet Alerts T Hot Sheet
Price: $16.81 --0%
Rating Summary:
20 Buy, 29 Hold, 2 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 5 | Down: 5 | New: 2
Rating Summary:
20 Buy, 29 Hold, 2 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 5 | Down: 5 | New: 2
Join SI Premium – FREE
Recently it was reported that AT&T (NYSE: T) made a $93 billion offer for Telefónica (NYSE: TEF). Telefónica denied receiving an official approach. Commenting, analyst David-A Wright of Deutsche Bank said investors' Vodafone (Nasdaq: VOD) read-through is misplaced.
"Investors will surely be excited that AT&T's approach indicates an interest in Europe that could read across into a joint bid with Verizon for Vodafone Group (as suggested previously by Bloomberg reports). We think this misses the point of the America Movil (NYSE: AMX) link and is not the right read across today," said Wright.
"Investors should remember that AT&T is closely linked with AMX though cross shareholdings . . . What we know right now is that a major reform in the Mexican Telco market is exposing AMX's core business to an increased competitive threat, and Telefonica is well positioned as the #2 operator to gain share. TEF is also a major competitor to AMX in other Latam regions. Should AT&T acquire TEF then the risk of an aggressive response could be lower across both Mexico and Latam," he said.
"Furthermore, AT&T and AMX would then 'control' through their TEF and KPN shareholdings the #3 and #4 mobile operators in Germany as potential candidates for consolidation in the midterm," added the analyst.
Deutsche Bank has a Hold rating on AT&T with a price target of $34.00
For an analyst ratings summary and ratings history on AT&T (NYSE: T)click here. For more ratings news on AT&T click here.
Shares of AT&T closed at $35.91 yesterday.
"Investors will surely be excited that AT&T's approach indicates an interest in Europe that could read across into a joint bid with Verizon for Vodafone Group (as suggested previously by Bloomberg reports). We think this misses the point of the America Movil (NYSE: AMX) link and is not the right read across today," said Wright.
"Investors should remember that AT&T is closely linked with AMX though cross shareholdings . . . What we know right now is that a major reform in the Mexican Telco market is exposing AMX's core business to an increased competitive threat, and Telefonica is well positioned as the #2 operator to gain share. TEF is also a major competitor to AMX in other Latam regions. Should AT&T acquire TEF then the risk of an aggressive response could be lower across both Mexico and Latam," he said.
"Furthermore, AT&T and AMX would then 'control' through their TEF and KPN shareholdings the #3 and #4 mobile operators in Germany as potential candidates for consolidation in the midterm," added the analyst.
Deutsche Bank has a Hold rating on AT&T with a price target of $34.00
For an analyst ratings summary and ratings history on AT&T (NYSE: T)click here. For more ratings news on AT&T click here.
Shares of AT&T closed at $35.91 yesterday.
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Midday movers: Tesla, Boeing rise; Uber, Old Dominion Freight fall
- Prosperity Bancshares (PB) PT Raised to $76 at Citi, 'credit risks are limited and feel comfortable recommending the shares as a Buy at today’s levels'
- AT&T (T) Tops Q1 EPS by 2c, Misses on Revenue
Create E-mail Alert Related Categories
Analyst Comments, Analyst EPS ViewRelated Entities
Deutsche BankSign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
