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Dixons: Nothing Is Done Until It Is Done

09 June 2014 by HCM

Given the global picture, some news was definitely needed to justify any widening. This is what we got on DXNSLN (Alcatel Lucent SA). There were articles in the week-end press reporting that Everything Everywhere (EE), the joint-venture between Orange and Deutsche Telekom, might be considering to end their relationship with Carphone Warehouse (CPW). On the back of that, the GBP3.6bln merger between CPW and DXNXLN could be under threat, as losing EE would undermine CPW’s position as the leading retailer for consumers to compare network deals. This potential merger sent DXNXLN’s risk premium from 250bps to 200bps when it was announced. Unsurprisingly, today DXNSLN’s 5 year CDS was the outlier and closed the session 10bps wider.