The Atos group saw its stock price end yesterday's session up sharply, driven by several elements including credible rumors about a probable takeover of the group by Capgemini. Let's take a look at the details of this news and the possible consequences that such an operation could have on the market.
Yesterday's session was rather positive for the Atos share. Indeed, it has gained many points until posting at the end of the day the strongest rise of the CAC 40.
Thus, Atos shares gained more than 4.2% of its value during this session alone and closed at 59.5%. This bullish progression allowed the stock to erase part of the important losses it had previously suffered.
This significant rise is undoubtedly the result of traders' enthusiasm in the face of current rumours about a possible takeover by Capgemini, which comes on top of the cheap takeovers of the digital services company.
So, the company's stock benefited yesterday from a persistent rumor regarding a possible acquisition deal of Atos by Capgemini. It is the company Exane BNP Paribas which mentioned in the morning a potential merger between the two companies whose two valuations are currently at extremes.
Indeed, we know that Atos' share price has lost many points over the past few months and that its current weakness could lead us to believe that shareholders would be open to an alternative strategic solution. It is also known that this data, combined with relatively low levels of debt, could make Atos a potential target for Capgemini, as the analyst firm indicates in its communication.
Of course, this is the first time Capgemini Group has targeted Atos Group to this extent, and in the past no such mention has occurred, due to the company's exposure to low-growth infrastructure services. However, with the current acceleration of cloud migration, which has been boosted by the pandemic, the desire to create a European super champion in IT and engineering services could be on Capgemini's mind. Not to mention that the deal would be likely to generate very attractive returns as the analyst points out.
However, this is not the first time that such rumours have influenced the market regarding a potential merger between the two French IT giants. Indeed, for many years, rumours have been circulating more or less regularly about this. But this is the first time that the context makes this possibility credible, especially as merger and acquisition operations have multiplied since the beginning of the year in this sector and elsewhere.