Spekulatius Posted January 10, 2019 Share Posted January 10, 2019 Presumably they can jack up prices if currency is devalued. It seems pretty sticky to supply internet bandwidth whatever happens. I doubt they can raise the prices because the GBP goes down against the USD. Why does it matter for a domestic business? They probably can raise prices if inflation in Britain picks up. The currency risk is real however. Link to comment Share on other sites More sharing options...
ander Posted January 10, 2019 Share Posted January 10, 2019 I agree with Spek. If you’re a USD investor the investment is worth less but does not explain current price. I’d like to see some insider buying at these levels as well. Link to comment Share on other sites More sharing options...
undervalued Posted January 10, 2019 Share Posted January 10, 2019 I agree with Spek. If you’re a USD investor the investment is worth less but does not explain current price. I’d like to see some insider buying at these levels as well. In the UBS interview, Fries said he is a net buyer of stock. I don't see him buying any stocks in the open market in the last 12 months? At least not visible from Yahoo Finance. Link to comment Share on other sites More sharing options...
khturbo Posted January 10, 2019 Share Posted January 10, 2019 On twitter someone mentioned that management might be guiding down expectations for Virgin Media: Link to comment Share on other sites More sharing options...
ander Posted January 10, 2019 Share Posted January 10, 2019 He bought about $3 million on May 30th at ~$29. I agree with Spek. If youre a USD investor the investment is worth less but does not explain current price. Id like to see some insider buying at these levels as well. In the UBS interview, Fries said he is a net buyer of stock. I don't see him buying any stocks in the open market in the last 12 months? At least not visible from Yahoo Finance. Link to comment Share on other sites More sharing options...
ander Posted January 10, 2019 Share Posted January 10, 2019 On twitter someone mentioned that management might be guiding down expectations for Virgin Media: Thx for sharing. They don't report until End of Feb / beginning of Mar1. Will be interesting to see if any analyst research notes pick up on it. Link to comment Share on other sites More sharing options...
maybe4less Posted January 10, 2019 Share Posted January 10, 2019 On twitter someone mentioned that management might be guiding down expectations for Virgin Media: I spoke with IR about this and there are two items that were mentioned: 1) a one-time 28M pound telco tax increase in 2019 and 2) the renewals of the BT Sports and Sky Sports contracts where fees will jump up somewhere in the mid-high single digits. Doesn't seem so bad... Link to comment Share on other sites More sharing options...
ander Posted January 11, 2019 Share Posted January 11, 2019 On twitter someone mentioned that management might be guiding down expectations for Virgin Media: I spoke with IR about this and there are two items that were mentioned: 1) a one-time 28M pound telco tax increase in 2019 and 2) the renewals of the BT Sports and Sky Sports contracts where fees will jump up somewhere in the mid-high single digits. Doesn't seem so bad... 1) Is that 1 time $28 million extra payment or a 1-time increase in perpetuity -- if it's the latter that's worth a few hundred million reduction in value and 2) any idea how much they were paying for BT Sports and Sky Sports? Thx. Link to comment Share on other sites More sharing options...
maybe4less Posted January 11, 2019 Share Posted January 11, 2019 On twitter someone mentioned that management might be guiding down expectations for Virgin Media: I spoke with IR about this and there are two items that were mentioned: 1) a one-time 28M pound telco tax increase in 2019 and 2) the renewals of the BT Sports and Sky Sports contracts where fees will jump up somewhere in the mid-high single digits. Doesn't seem so bad... 1) Is that 1 time $28 million extra payment or a 1-time increase in perpetuity -- if it's the latter that's worth a few hundred million reduction in value and 2) any idea how much they were paying for BT Sports and Sky Sports? Thx. It's a little complicated, but basically 3 years ago the British government revalued all networks in the country to fair market value in order to update assessments of this tax, which is basically like a property tax. After the updated valuation exercise, Virgin Media owed 140M more pounds each year in tax. However, they didn't have to pay the increase in year 1, it is phased in over five years. Last year the increase was 18M pounds and this year it was 28M pounds for whatever reason. So a "surprise" increase of 8M more pounds. We have 42M pounds of increases to go over the next two years and then the government isn't schedule to revalue the network for another five years. This has actually all been outlined in the fixed income filings for Virgin, so not sure why it is such a surprise. Not sure how much they've been paying BT and Sky for the sports, but this also should be a surprise as these contracts come up for renewal on a schedule and typically increase by similar amounts. I guess this is a long way of saying I don't think this is the reason that the stock has declined. Link to comment Share on other sites More sharing options...
Sunrider Posted January 20, 2019 Share Posted January 20, 2019 Apologies if this has been covered at length much earlier, I only re-read the discussion back to October. I've had a brief look at the last Q and the results announcement and at today's market cap of ca. $17bn, I see this is essentially as a Greenblat stub. If the $10bn Vodafone cash receipts go purely to paying down debt, then stub value should increase by ca. 58%, which ignores the other ca. $8bn debt, which seem to be moved with the sold entities. Putting that in, the stub value should increase by a shade over a 100%. I understand that they are highly levered like all Malone companies, and I've not read enough of the Q to figure out the $EBITDA that goes with the sold businesses, vs. what remains (I think the announcement mentioned it's ca. 28% of OCF). Yet, presuming the other markets don't turn into a complete dog's breakfast, this seems very very cheap. What am I getting wrong/missing here? Thank you. Link to comment Share on other sites More sharing options...
rolling Posted January 20, 2019 Share Posted January 20, 2019 What am I getting wrong/missing here? Thank you. As an european my answer is: likelihood of the deal not going through. I've been looking at this but stayed out for that reason. My uninformed guess is that it is much more likely a no than a yes Link to comment Share on other sites More sharing options...
Spekulatius Posted January 20, 2019 Share Posted January 20, 2019 What am I getting wrong/missing here? Thank you. As an european my answer is: likelihood of the deal not going through. I've been looking at this but stayed out for that reason. My uninformed guess is that it is much more likely a no than a yes I agree, the deal not going though - at least not to the extend envisioned, is quite high. The regulators in Europe have a lot of teeth and there are assets in a lot of different countries involved. It feels like it’s priced in though, but my experience tells me that it almost never is. Link to comment Share on other sites More sharing options...
khturbo Posted January 20, 2019 Share Posted January 20, 2019 Ya I agree this is a straight up merger arb stock at this point and I'm sure it will continue trading like it has until we get resolution on the deal. Link to comment Share on other sites More sharing options...
cameronfen Posted January 20, 2019 Share Posted January 20, 2019 Apologies if this has been covered at length much earlier, I only re-read the discussion back to October. I've had a brief look at the last Q and the results announcement and at today's market cap of ca. $17bn, I see this is essentially as a Greenblat stub. If the $10bn Vodafone cash receipts go purely to paying down debt, then stub value should increase by ca. 58%, which ignores the other ca. $8bn debt, which seem to be moved with the sold entities. Putting that in, the stub value should increase by a shade over a 100%. I understand that they are highly levered like all Malone companies, and I've not read enough of the Q to figure out the $EBITDA that goes with the sold businesses, vs. what remains (I think the announcement mentioned it's ca. 28% of OCF). Yet, presuming the other markets don't turn into a complete dog's breakfast, this seems very very cheap. What am I getting wrong/missing here? Thank you. For one the merger isn't a done deal. It could fail for anti-trust reasons and that's a significant probability Link to comment Share on other sites More sharing options...
cmlber Posted January 20, 2019 Share Posted January 20, 2019 As an european my answer is: likelihood of the deal not going through. I've been looking at this but stayed out for that reason. My uninformed guess is that it is much more likely a no than a yes Why do you think it's much more likely a no than a yes? What's different about this merger than the Vodafone Ziggo merger which was approved by the European Commission just 2 years ago? Link to comment Share on other sites More sharing options...
rolling Posted January 20, 2019 Share Posted January 20, 2019 As an european my answer is: likelihood of the deal not going through. I've been looking at this but stayed out for that reason. My uninformed guess is that it is much more likely a no than a yes Why do you think it's much more likely a no than a yes? What's different about this merger than the Vodafone Ziggo merger which was approved by the European Commission just 2 years ago? As I said, my guess is very little informed. Regulators over here tend to overregulate. The difference I see is in size: this is a much bigger deal and vodafone isn't getting smaller. It might happen, but I wouldn't put it at 50-50 (and 50-50 is too big a risk for me) Link to comment Share on other sites More sharing options...
WayWardCloud Posted January 20, 2019 Share Posted January 20, 2019 Does anyone know if Vodafone has to pay the break up fee (1/4 billion Euros!) if the deal fails because of the regulator or only if it's by their own fault? Ps: Maybe I'm being naive but I don't think either Liberty's or Vodafone's management/lawyers would have moved forward with the deal if they didn't think the chances of approval were significantly higher than 50/50 - and they have so much more experience than us about EU regulations. Link to comment Share on other sites More sharing options...
cmlber Posted January 21, 2019 Share Posted January 21, 2019 As an european my answer is: likelihood of the deal not going through. I've been looking at this but stayed out for that reason. My uninformed guess is that it is much more likely a no than a yes Why do you think it's much more likely a no than a yes? What's different about this merger than the Vodafone Ziggo merger which was approved by the European Commission just 2 years ago? As I said, my guess is very little informed. Regulators over here tend to overregulate. The difference I see is in size: this is a much bigger deal and vodafone isn't getting smaller. It might happen, but I wouldn't put it at 50-50 (and 50-50 is too big a risk for me) It's not a "much" bigger deal. Ziggo was valued at 14 billion euro in the approved Netherlands merger, compared to the current assets being sold at an 18.4 billion euro value. Both are fixed-mobile deals, there isn't any overlap where households would have previously had two cable options and now would have one. Link to comment Share on other sites More sharing options...
Sunrider Posted January 21, 2019 Share Posted January 21, 2019 Thank you all. I suppose the next question is, if the deal were to fail, then what should this highly levered Malone controlled, but Fries managed, company trade-at? Link to comment Share on other sites More sharing options...
skanjete Posted January 21, 2019 Share Posted January 21, 2019 I think I heard Malone in his last interview mention a 80% chance of the deal going through. Of course, I suppose he will be somewhat biased as well. Link to comment Share on other sites More sharing options...
vince Posted January 21, 2019 Share Posted January 21, 2019 Does anyone know if Vodafone has to pay the break up fee (1/4 billion Euros!) if the deal fails because of the regulator or only if it's by their own fault? Ps: Maybe I'm being naive but I don't think either Liberty's or Vodafone's management/lawyers would have moved forward with the deal if they didn't think the chances of approval were significantly higher than 50/50 - and they have so much more experience than us about EU regulations. This is the right way to think about it imo, therefore I think chances are greater than 50-50. Link to comment Share on other sites More sharing options...
scorpioncapital Posted January 22, 2019 Share Posted January 22, 2019 If they were allowed to buy Germany, why aren't they allowed to sell it ? Did the 10 years plus they held it make it such a monopoly over this period ? Link to comment Share on other sites More sharing options...
walkie518 Posted January 22, 2019 Share Posted January 22, 2019 Does anyone know if Vodafone has to pay the break up fee (1/4 billion Euros!) if the deal fails because of the regulator or only if it's by their own fault? Ps: Maybe I'm being naive but I don't think either Liberty's or Vodafone's management/lawyers would have moved forward with the deal if they didn't think the chances of approval were significantly higher than 50/50 - and they have so much more experience than us about EU regulations. This is the right way to think about it imo, therefore I think chances are greater than 50-50. In a recent interview, I believe Malone pegged closing at 80% Link to comment Share on other sites More sharing options...
WayWardCloud Posted February 4, 2019 Share Posted February 4, 2019 "Sunrise in talks to buy Liberty’s Swiss cable arm" -Financial Times https://www.ft.com/content/1da14148-266a-11e9-8ce6-5db4543da632 Link to comment Share on other sites More sharing options...
dwy000 Posted February 27, 2019 Share Posted February 27, 2019 Full year results out. https://2zn23x1nwzzj494slw48aylw-wpengine.netdna-ssl.com/wp-content/uploads/2019/02/Liberty-Global-Q4-2018-Press-Release.pdf Sale of Switzerland is great news given the horrible results from that region. Decent price given customer trends. Very positive to see that they still expect Germany to close by mid year. UK was "meh". Definitely slowing growth and I cant imagine they are hitting their capex return numbers for Lightning expansion. If the sales close (and everything today points to that outcome) this is still ridiculously cheap. Link to comment Share on other sites More sharing options...
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