SI

They are doing ~$2.75/share in fcf. Telecom historically trades at 10x fcf. The caveat is that the market must be comforted that fcf is sustainable and the debt level is appropriate. At $31-32bn in net debt, they have $3-4bn of leverage above their target leverage. Based on 1.08bn shares and that thought process you take $3.50 off that price until the rest of the excess leverage is gone(call it 2 years based on the $1.5bn of annual debt retirement they’ve been averaging). Fcf has been flat to up but its the core question here because the asset value is well in hand.

It is actually a really decent target for a squeeze. It’s the first squeeze candidate in the S&P 500 as far as i can tell. Of the 14 covering analysts there is only 1 buy rated and its even in rarer air with the majority sell rated meaning wall street cannot come help the funds by downgrading. The indexes are here in mass as a result, in fact the largest two active managers involved both have board representatives with at least one of 2 frozen by an nda. The largest active manager outside those passive managers owns just 90bps at Alpine. As far as Lumen goes have roughly triple the debt that they have market cap so when you move it, not only are your indexes force buying any HF that wants to pile on can short the debt have a 2x positive carry(div yield 2x bond yield on a mid 30s payout ratio) which is a huge lever. Besides having no institutional guys to sell, the funds there for income even at elevated prices still have divd yields they cant replace. A lot of the rest is held by retirees which again depend on the income and who may have had stock from the 30 predecessor companies some of which go back over 3 decades. My point here is that potential sellers in a squeeze are few and far between. Maybe the strongest point is that there is no chance at supply unlike amc or american air. The owners on the board have talked about $30 being fair value and over the summer the mgmt team presented a slide that said $25+ so you aren’t going to see any issuance here. In short, whoever is squeezing seems to either coincidentally picked a strong candidate but i do not believe this is a coincidence.

What i meant was if Odet is trading at a 30% discount to BOL, does BOL have to offer a 30% premium to Odet? At first you would consider what lbdrk just offered for gliba. Gliba was trading at a low double digit discount but in the merger went at a mid single discount so the independent shareholders at lbrdk would get something for adding complexity besides greater liquidity. Would BOL want to ‘split the difference’ and get 15% of that discount for the economic merit of BOL? At second glance - minorities were 8% of odet shares vs 6x higher for BOL. It is an important question because the discount is obviously materially higher than in gliba. With VB and his employees owning so much more, it is hard to believe a tender wouldn’t be done at a economically equivalent price and as we saw for directtv/liberty/news corp - paying a premium can be justified and in this case is just a way to further increase VB’s control. Now that may be more trouble than its worth but i think leaves me believing we will see a healthy premium for Odet shares in the exchange ratio. On why do it, if your ultimate aim is to use the VIV cash flows to finance a slow take private before VIV gets a self financed tender offer for control, what’s next? To me it is always using the VIV cash flows to power BOL in a merger. VIV cash flows can be said to bring the culture, finance and infrastructure ministers ever closer to BOL. If BOL is going to stand against the global transportation companies, do they need VIV’s financial strength, i believe so. If VB does, this is how he will proceed or more importantly if he wants the VIV/BOL exchange ratio to his liking, this will be the rationale to merge Odet first(maybe at the same time as the VIV tender for control). He needs the BOL stock at the multiples of the global transport companies and arguably then wants VIV to float a control premium.

What i wonder is with all the BOL insiders owning Odet and what i hear is that other lower employees buying Odet, is there an offer that possibly wouldn’t offer stock? My assumption is that it will be an offer of BOL stock but if you were to treat Blue Solutions so fairly(my opinion) is a cash tender for the minorities that is largely insiders and, with IVA gone, no longer any funds beyond 3-6k shares(we are in that range), is there a good reason to only offer cash? Now does the exchange ratio offer value parity or is the discount split for both parties, maybe, but i doubt it but that’s what makes a market.

Thanks for the document. Reading the document is consistent with what the company has said, a squeeze out would have to be done in concert, given their are multiple shareholders within the complex that own shares of Odet and the totality of their holdings have now comfortably breached 90%. I have always had a bit of doubt on whether they would consider a cash offer and whether they would do it at 90%. After reading this document it seems the path would be a take-out offer in shares or an option that included shares followed by a squeeze out for cash. I have talked to them about the 90% / 95% threshold and they have been unsurprisingly vague. My guess here is that while IVA Worldwide sat on a 100,000 shares in the position of a forced seller, VB could be the most economical by buying those in cash. Now that those have mostly been repurchased by VB and with the UMG IPO mandated for next year given their tencent agreement this is the appropriate time to move forward. Further, with the upped VIV dividends that have worked their way through the system, Odet now sits with net cash which wasn’t the case a few years ago when they had a few hundred million in debt. Basically since the failed BOL bond offering(even the December Vivendi bond rating downgrade by S&P) the consolidation would now bring vast simplification into the complex and net cash the latter deserving mention as any squeeze out would require at least some cash, likely the level of debt Odet had a few years ago. BUT in 2020, the cash was way more scarce given the economic contagion and Odet improved its cash position by ~100mn and firmly into balance sheet accretion when it means something to the bond market for VIV and BOL.

These guys were added to the ftse 100 after the lse close. Share inclusion date is a few days before Xmas.

In loeb’s letter, he said he was the fulcrum investor in the equity offering that brought them out of bankruptcy- none of these guys ended up with equity unintentionally.

That is excellent work. I spoke with several brokers in the area who confirmed that it cleared at an elevated price. One of the brokers said it hadn't been touched in years and another described the price at a level where you could fund the "upsized" portion of the purchase price by just selling the excess hardwoods down to a level from which you could sustainably harvest. It is a guess but I would doubt that $1,750/acre given the tone of the conversation but $1,300-$1,400 wouldn't surprise me.

Word around the campfire was the timber sale got done in excess of $1,000/acre. One of the people I spoke with said it was closer to $1200 as their timber was incredibly well stocked(i.e. excess inventory).

From what I understood, the price was over the pwc stated price by as much as 50mm AUD, though i’d caution you the price was at the high end of expectations bc it was a neighbor(operator) backed by CDN, ~ pension, money with collateral of the combined farm and second generation buyer where price wasn’t the focus.

VB ‘s mechanism for control the Bretton pulleys, explained here: https://www.valuewalk.com/wp-content/uploads/2015/02/MW_Bollore_02172015.pdf

Amf website

If it went unnoticed, I’ll mention it here: ~6700 shares were purchased of odet this week by the pulley system. That is as much as the 3rd largest outside shareholder.

I am with JRM on CenturyLink. If the 5.2-5.3x ebitda multiple holds, you get $2/share this year if the company continues deleveraging. With $1 in dividends that is a 23% return. With Brookfield taking out its most closely traded public comp(though mostly a consumer biz) at CBB and Zayo on the way out the door to private equity as the closest the enterprise peer - there is the chance for multiple expansion which i would expect in 2021 as they hit their target leverage. At that point i think the company again trades on free cash flow yield which at $3/share and a 10% fcf yield(long term telco multiple is 10x earnings so it isn’t quite apples to apples) implies that if we get multiple expansion it could be explosive. Lastly, earlier this week the company vastly improved their governance. To me this was the biggest risk. A bit more color: -Harvey, the chair, was a bigger issue than Glen, the former ceo, but a break in continuity was needed. -It is more than just those two things as it puts the board on notice it is bloated in number. -Those with a quarter century of board membership now see the door. -It lowers the risk that Jeff Storey, the ceo, would leave out of frustration with this legacy CTL board. It also ensures Jeff's successor is a capitalist from LVLT. -While the exit door may not be today for the rest of them, it also shows them who is in charge until the board refresh is complete. -It allows the center of gravity to drift out of Louisiana and the RLEC mindset. -It likely speeds the pace of decision making. -It shows potential infrastructure buyers that this board is now open for business as the new chair was the previous nominee of the 13D filer and the new board member also comes from the 13D filer, Southeastern.

The equity web got was likely the pref div which could be script at oxy’s discretion.