BUY KPN NA – All lining up, +30% upside potential

*We continue to see KPN cheap as our DCF valuation comes in around EUR 3.75 which leaves a +30% upside

*With the elections out of the way, the Green party having lost half of their seats, and KPN’s agreement with APG (Dutch pension fund) to participate in a joint venture to further accelerate the fiber rollout in the Netherlands, we see a clear path to for any (long speculated) PE buyer to approach the government to negotiate approval for a bid

*We have through the last months expected that any foreign buyer would need a local partner in order for a successful bid – similar to what we saw when Macquarie launched a bid for TDC DC

*The 2023 Ambitions and further acceleration of the fiber rollout leaves good prospects for the company as a standalone as well although we see a potential for the stock dropping to around EUR 2.6 in case arbs lose hope in the name but see the +30/-10% risk reward as attractive here