Orange NYSE: ORAN PARYŻ&MEDIOLAN: ORA telekom

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PARIS (Reuters) - Orange, France's biggest telecoms operator, on Friday named Christel Heydemann its new chief executive, making her the first woman to lead the former monopoly amid a revamp of its governance.

The 47-year old Heydemann, a former graduate of France's elite engineering school Polytechnique, will replace Stephane Richard at the helm of the state-controlled group after a court convicted him of complicity of misuse of public funds.

Richard, who has led Orange for the past 12 years, denies any wrongdoing.

Heydemann, who comes from French electric equipment group Schneider Electric (PA:SCHN), becomes the third woman appointed to lead a company listed on the French CAC 40 index, after Engie's Catherine MacGregor and Estelle Brachlianoff, who is slated to take the reins of utility group Veolia on July 1.

Heydemann will start at Orange on April 4.

"As a member of the board for nearly five years, I have gained a solid understanding of the technological challenges and opportunities that lie before us. I know that these are significant," Heydemann said in a statement.

Richard was initially slated to quit the telecoms group on Monday, but Orange's board voted to maintain him as chairman until the company' shareholder meeting on May 19 at the latest. He will also continue to run operations until April 4.

Richard is also to be replaced as non-executive chairman of the group, as the group is also splitting the roles CEO and chairman of the board.

"Very happy to welcome Christel Heydemann, future CEO of Orange. A woman with professional and human qualities that will allow her to meet the group's challenges with the help of our main wealth: our teams worldwide," Richard tweeted on Friday.

Shares in Orange were trading up 0.5% at 1019 GMT.

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Orange (PA:ORAN) stock rose 1.3% after the telecoms operator expressed confidence in returning to core profit growth in 2022 after difficulties last year.

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Orange (EPA:ORAN), France's biggest telecoms operator, said its first-quarter core operating profit grew 1%.

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PARIS/MADRID (Reuters) - Orange and MasMovil have signed a binding agreement to combine operations in Spain in a deal valuing the merged entity at close to $19 billion, the two telecoms firms said in a statement on Saturday.

The merger creates a heavyweight spanning mobile and broadband, posing a challenge to top player Telefonica (NYSE:TEF) and analysts say possibly opening the way to similar alliances in markets such as Italy, Portugal and the UK.

The merger of the second and fourth largest telecoms operators respectively also leaves third-ranked Vodafone (NASDAQ:VOD) stranded, albeit the beneficiary of a more consolidated market that is expected to reduce competition and boost operators’ profitability.

The tie-up is expected to test the European Commission's appetite for consolidation. It has previously opposed deals that reduce the number of players from four to three in major markets.

Spain's mobile market is a four-way fight with Telefonica's Movistar brand holding a 28.24% share, Orange 22.91%, Vodafone 22.26% and MasMovil with 20.55%, data from market regulator CNMC showed in March.

The Commission's response will also reveal whether it is willing to favour a market structure with fewer operators and potentially higher investments on infrastructure -- as lobbied for by industry -- or if it will stick to a consumer-centric stance marked by fierce competition and low prices.

The merger in Spain is based on an enterprise value of 18.6 billion euros ($19 billion), the companies said in the statement, including 10.9 billion for MasMovil and 7.8 billion for Orange Spain.

The merged entity would generate more than 7.3 billion euros in annual revenue and more than 2.2 billion euros of annual core operating profits, they said.

The combined joint venture will be controlled equally by Orange and MasMovil. A 6.6 billion-euro debt package will finance the transaction.

It will include a 4.2 billion euro upstream payment to Orange, to make up for its lower valuation as compared to MasMovil, given its higher level of debt.

The deal includes a two-year lock-up provision that prevents Orange and MasMovil from selling their shares, a spokesperson for Orange said.

The aim is to have a possible initial public offering (IPO) after a lock-up period, the spokesperson said.

Orange will have a pre-emptive right to buy the shares owned by MasMovil in the joint venture following the lock-up period, the Orange spokesperson said, allowing it to take control of the entity and consolidate it in its accounts.

The transaction is subject to approval from EU antitrust authorities. It is expected to close in the second-half of 2023 "at the latest".

Orange is controlled by the French state through a 23% stake, while MasMovil's parent is London-based Lorca JV Co, a holding majority owned by buyout funds KKR, Providence and Cinven.

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Orange (EPA:ORAN), France's biggest telecoms firm, said its second-quarter core operating profit rose 0.5% from a year earlier, as strong growth from its African and Middle East division offset a fall in sales in its home country and Spain.

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Orange double-upgraded at BofA as 'investment case stands out'

Orange (EPA:ORAN) (NYSE:ORAN) shares were double-upgraded to Buy from Underperform at BofA on Wednesday, with analysts lifting the price target to $13 from $8.80 per share.

They told investors that the French telecommunications company is "ticking all boxes," and they see a potential 25% upside in the stock.

Analysts explained that across the European telecom sector, there are several thematic drivers and financial profiles investors favor, such as improving competitive trends, a path to lower investment needs, in-market consolidation opportunities, infra ownership, and a route to growing dividend returns.

"Orange’s investment case stands out, in our view, as one of the few in the sector that captures all these elements while still at an attractive valuation," analysts argue.

"We see Orange as uniquely positioned to combine the positive thematic drivers for EU telecoms," they added. The analysts pointed to a stabilising domestic market with improved competition, a head start in the fibre roll-out, direct involvement in Spanish consolidation, and one of the last 100%-owned tower assets with "Totem" as factors they see driving the stock and company's performance.

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