UPDATE: BUY TITr vs SELLING TIT

STAY LONG THE SAVERS (TITR) VS ORDINARY (TIT)

According to Bloomberg TIT is looking at a savers conversion into ordinaries.

In-line with comments off Q2 call that looking at the savers was on the table for H2.

Talks of a a voluntary one-for-one exchange of €500m, so with conversion fee it implies a 10% discount to the Ordinary shares.

Savers hold  30% of TIT’s total share capital.

Conversion would deliver 4-10% value accretion and 5%-12% 2016E FCF accretion.

We reiterate our BUY rating on TITr/TIT spread.

Currently  +2.49%

 

INTERESTING NEWS FROM THE TIT IM CC

Friday • 07 August 2015 • 15:30

During the CC the CEO said they will take collapsing the spread to the board in H2.

It trades around 17-22% normally. As we write it is at 16.3%.

So you’re downside if they vote no is probably 3-5%.

With your upside being 18%.

Would be happy to put the spread on at 17% or wider