Orange Topped FEZ in Preliminary Merger Talks with Bouygues
Global Markets Ring in the New Year with Dreadful Results
FEZ’s top stocks
All the stocks of the SPDR Euro STOXX 50 ETF (FEZ) had negative returns in the week ended January 8, 2016. Following are the stocks with the least negative returns:
Orange (ORAN): -1.2%
L’Oréal (LRLCY): -3.6%
SAP (SAP): -3.8%
Enel SpA: -3.9%
Sanofi (SNY): -4.3%
Among these stocks, Orange contributed the least negative return.
Orange-Bouygues merger talks
On Wednesday, January 6, 2016, Orange declared that it has entered into preliminary merger talks to buy the telecom assets from Bouygues.
If the deal moves ahead and is completed, it would reduce French telecom operators from four to three.
After the merger, Orange and Bouygues would have a 50% share of the French telecommunication market.
According to French newspaper reports, the deal could be worth 10 billion euros.
Bouygues said it has signed the agreement with Orange and that it’s interested in its long-term presence in the telecommunication sector.
Orange’s returns
Orange is currently trading at 15.3 euros. Its 52-week high is 17.0 euros. Its 52-week low is 12.2 euros. The stock returned 15% in 2015. Its current price-to-earnings ratio is 41.27x, which is higher than competitors Telefonica and Deutsche Telekom.
The stock is currently trading 2% above its 100-day moving average and 3% below its 50-day moving average. It’s trading at par with its 20-day moving average. Its 50-day moving average is a strong resistance point for the stock. Analysts estimates indicate an upside of 12% for Orange over the next 12-month period from the current levels as of January 8, 2016.
In the next part of this series, we’ll look at the performance of FEZ’s bottom-performing stocks in the week ended January 8, 2016.
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