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ATOS SE Equity Shorts Grow As Curve Stabilises Following Yesterday’s Sell-Off

IT SECTOR
  • Noting a BBG sources piece yesterday evening indicating that ATOS SE is demanding an extra €500mn for the Kretinsky-led acquisition of Tech Foundations.
  • As per our bullets yesterday, the weekend saw French newspaper reports of a planned court-assisted negotiation of impending maturities followed by a morning appointment of a new CEO and a revised (downwards) FCF forecast.
  • The piece cites sources as saying the acquiring consortium is ready to negotiate terms but that the €500mn figure is excessive though the company is eager to finalize the deal this month (we note that maturities as early as this month were the motivation cited for the potential court reconciliation as per weekend reports).
  • Given the politically sensitive nature of the deal, the ongoing sale of assets elsewhere to Airbus and the near-term liquidity concerns at ATOS, the attempt to negotiate terms at this stage is a risky development.
  • Updating our price run from yesterday, the ATOS curve sold off further in the PM as fears grew around a potential restructuring resulting in the juniorisation or conversion of existing bonds (24s -€27.52 DoD, 25s -€15.96 DoD and longer bonds seeing smaller but still significant sell-offs).
  • The curve appears to have relatively stabilized this morning with 25s streaming -€1.30 and 26s -€2.40. Equity shorts now stand at 12% of the market cap after the stock shed 15% yesterday.

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