Computing Firm OVHcloud IPO Set to Go Ahead at Low End of Price Range

One of the bookrunners said the IPO – which will likely be one of France’s biggest initial public offerings of the year – is already oversubscribed, although the books will not close until Thursday midday.

On Oct. 5, OVHcloud – the second-biggest European-based cloud services provider after Deutsche Telekom’s T-Systems according to Synergy Research – had set a price range of 18.5 to 20 euros per share, which would lead to a market value of 3.50 to 3.74 billion euros. The company was not immediately available for comment on the likely outcome.

The firm had also said that new shares would raise about 350 million euros, while the sale of existing shares by shareholders including the Klaba family would account for a further 50 million euros.

Since then, financial markets volatility due to fear of inflation and possible monetary tightening, as well as the troubles of Chinese real estate giant Evergrande, have led to uncertainty and French Icade Santé and Swiss Chronext have both dropped listing plans.

OVHcloud’s IPO is going ahead despite the market uncertainty and news of a network outage on Wednesday, just two days ahead of its planned listing on Friday.

Chairman Octave Klaba said on Twitter the outage had followed a “human error” during the reconfiguration of one of its data centres in the United States. The network returned to normal around an hour later at 0815 GMT.

It was the second major disruption for OVHcloud this year.

In March, a fire at the company disrupted millions of websites, knocking out government agencies’ portals, banks, shops, news websites and taking out a chunk of the .FR web space.

OVHcloud is seen by some politicians as a potential alternative to U.S. giants Amazon Web Services, Microsoft’s Azure and Google Cloud.

However, the company has so far lacked the scale and financial clout to dent these firms’ market share.

For a look at all of today’s economic events, check out our economic calendar.

($1 = 0.8654 euros)

(Reporting by Richard Lough, Mathieu Rosemain, Matthieu Protard and Marc Angrand; Writing by Mathieu Rosemain, Ingrid Melander and Geert De Clercq; editing by Jason Neely and Philippa Fletcher)

European Shares Hover Below Record High, Telecom Stocks Jump

The pan-European STOXX 600 index slipped 0.1% by 07:19 GMT, after coming just a point below its record high in the previous session.

Media and utilities fell the most among sectors, while telecoms gained 0.8%.

Deutsche Telekom rose 2.5% after it struck a share-swap deal with Softbank Group to increase its stake in U.S. unit T-Mobile and sold its Dutch unit.

Shares in Sweden’s Tele2 rose 1%, while KPN gained almost 4%.

Germany’s Allianz slipped 0.5% after Reuters reported that regulators have launched an investigation into the company after the demise of some of its U.S. investment funds last year.

For a look at all of today’s economic events, check out our economic calendar.

(Reporting by Sruthi Shankar in Bengaluru; Editing by Shounak Dasgupta)

 

European Stocks Extend Record Rally on Lift From Insurers, M&A Activity

The pan-European STOXX 600 index inched up 0.1%, extending gains to a ninth consecutive session.

British insurer Aviva rose 3.5% after saying it would return at least 4 billion pounds ($5.5 billion) to shareholders, while Zurich Insurance Group added 3.8% on reporting a 60% jump in first-half business operating profit.

Dutch insurer Aegon NV jumped 7.3% after posting much better than expected second-quarter earnings.

Deutsche Telekom rose 2.8% after raising its profit outlook for the second time this year.

The benchmark STOXX 600 clocked its longest winning streak since June, as earnings reports and optimism related to the pace of vaccination across Europe reinforced investor confidence in an economic recovery.

Data showed Britain’s economy grew by a faster than expected 1% in June, after many hospitality firms restarted indoor service in mid-May and as more people visited doctors following the pandemic, lifting healthcare.

Factory output fell in June in the euro zone, as Germany, the bloc’s industrial powerhouse, faltered amid supply bottlenecks, European Union estimates showed.

“The second successive monthly fall in euro-zone industrial production in June was largely due to ongoing supply-chain difficulties in Germany,” said Andrew Kenningham, chief Europe economist at Capital Economics.

“As these will ease only slowly, we don’t expect industry to contribute much to economic growth in the coming months, even though demand is still red hot,” Kenningham added.

Cineworld Group rose 3.9% after it said it was considering a listing of itself or a partial listing of its movie chain Regal on Wall Street.

Meanwhile, Adidas rose 1.6% after selling its Reebok brand to Authentic Brands Groups for up to 2.1 billion euros ($2.5 billion), as the German sporting goods company sought to draw a line under an ill-fated investment.

Stock Spirits Group soared 43.7% funds as funds affiliated with private-equity firm CVC agreed to take over the London-listed vodka maker in a deal valuing it at 767 million pounds ($1.1 billion).

Dragging down miners, UK-listed shares of global miner Rio Tinto slipped 5.5% on trading ex-dividend.

For a look at all of today’s economic events, check out our economic calendar.

(Reporting by Sruthi Shankar and Shreyashi Sanyal in BengaluruEditing by Shounak Dasgupta and David Holmes)

Deutsche Telekom in Talks to Buy Out Shares in T-Mobile From Softbank

Deutsche Telekom, by revenue the largest telecommunications provider in Europe, announced that it is in talks to acquire stakes in its U.S. subsidiary T-Mobile from Japanese multinational conglomerate holding company Softbank.

The European telecommunications leader, Deutsche Telekom, that delivers services to more than 150 million global customers, owns over 40% stake in its U.S. subsidiary T-Mobile but it can vote shares owned by Japanese holding company SoftBank.

That brings its voting stake to 67%, ensuring overall financial control and allow the company to consolidate the financial statement of T-Mobile. Hoettges added that the negotiation is still in its nascent stage will inform when one has reached.

CEO Tim Hoettges’ comment

CEO Tim Hoettges on Friday said that the deal will be under a shareholder agreement and it has the right of first refusal.

According to Reuters, Hoettges, answering a question at Deutsche Telekom’s annual general meeting, said Softbank was seeking to sell down its stake due to “heightened liquidity needs arising from the demanding economic environment”.

He further noted that, under a 4-year shareholder agreement that entered effect when T-Mobile completed its acquisition of Sprint, Deutsche Telekom had the pre-emptive purchase right to ensure it retains control of its U.S. subsidiary, Reuters reported.

CEO also confirmed that the profit outlook was resilient to the coronavirus pandemic.

“Of course, we are also feeling the effects. From bad debts. Forgone roaming revenues and temporary shop closures,” Hoettges said, according to pre-released extracts of his video address to the event which is being held online.

“But we are confident that we will bounce back. Because digitalization is everywhere right now. And this brings us opportunities.”

Stock price outlook

According to Tipranks, three analysts forecast the average price in 12 months at $18.83 with a high of $19.28 and a low of $17.93. The average price target represents a 10.76% increase from the last price of $17.00.