BUY KPN VS. SXKP

America Movil Offering Bonds Exchangeable Into KPN shares.

Fundamentally like this stock given its 100% Europe, has improving operational momentum and is continually mentioned as a bid target, most recently by Altice.

Today’s weakness is a good trading opportunity on the mandatory convert, can hedge with the sector if you want to take the market risk out.

The EUR750m convert equates to about 170m shares that WILL convert into shares because it is mandatory. As a result the delta is quite high and you can assume it will be well hedged (~85%, though HF allocation is less easy to predict).

The deal is priced at VWAP today, so it pays for those taking part in the deal to get the price down.

It has now traded 100m shares of ~140m assuming 0.85 delta. VWAP to the close from here should realise a decent technical bounce over the next couple of days.

Happy to facilitate.