ItsAValueTrap Posted July 5, 2015 Share Posted July 5, 2015 If LILAC didn't offer a differentiated investment opportunity (i.e. higher growth potential in a higher risk geography) to Global, then why do the tracking stock in the first place? Because Malone knows that investors may be misled by the tracking stock. LILAC mostly consists of mature assets without that much room for potential because it's a post turnaround asset. Global consists largely of UK assets from Virgin Media, which has a lot of turnaround potential. LILAC is also a story stock on the growth of Latin America. Where do you get your info about customer satisfaction/quality of the products and how do you avoid sample bias? Reddit.com is one place to look for comments on the Horizon set-top box. Sample bias is an issue. I suppose that you can find every single comment on Reddit about the Horizon box, and try to objectively categorize each comment as positive, neutral, or negative. Reddit has some neutral comments but I don't remember any positive comments. Link to comment Share on other sites More sharing options...
loganc Posted July 5, 2015 Share Posted July 5, 2015 If LILAC didn't offer a differentiated investment opportunity (i.e. higher growth potential in a higher risk geography) to Global, then why do the tracking stock in the first place? Because Malone knows that investors may be misled by the tracking stock. LILAC mostly consists of mature assets without that much room for potential because it's a post turnaround asset. Global consists largely of UK assets from Virgin Media, which has a lot of turnaround potential. LILAC is also a story stock on the growth of Latin America. Then why did they trade approximately 422MM of LBTYK stock for the 20% minority interest of VTR in early 2014? Why not issue a tracking stock where the attributable assets would be the 80% VTR and 60% LCPR interests? Link to comment Share on other sites More sharing options...
ni-co Posted July 5, 2015 Share Posted July 5, 2015 Malone hasn't come over as a ruthless stock promoter so far. He does those transactions because they make financial sense and he's normally quite candid with his motives. He said that it's time for a roll-up in Latin America. He needs the stock as acquisition currency and of course he wants to highlight a small but rapidly growing part of Global which are both reasons why I'm interested. I don't get the feeling that Malone wants to push his stock on me. I own Liberty Global largely for their broadband networks and especially for their growth potential in the b2b sector. Set-top boxes are a secondary concern for me. Regarding EBITDA multiples: Global paid 9.3x post synergies (11+ pre synergies) for Ziggo. I doubt that they'd sell it at 10x. Link to comment Share on other sites More sharing options...
Liberty Posted July 6, 2015 Author Share Posted July 6, 2015 http://www.hollywoodreporter.com/news/liberty-global-acquires-irelands-tv3-802415 Link to comment Share on other sites More sharing options...
Buffetteer Posted July 7, 2015 Share Posted July 7, 2015 So if I own 240 shares of LBTYA should I have received 12 shares of LiLAK? At the close of trading today, July 1, 2015, Liberty Global distributed, as a dividend (or a “bonus issue” under U.K. law), to holders of its Class A, Class B and Class C ordinary shares as of 5:00 p.m. Eastern time on June 24, 2015 (the “record date”), one share of the corresponding class of LiLAC Group ordinary shares for each 20 Liberty Global ordinary shares held by each shareholder as of the record date. We distributed approximately 12.6 million LILA, 0.5 million LILAB and 30.8 million LILAK shares in total. Cash will be paid in lieu of fractional LiLAC Group ordinary shares. Link to comment Share on other sites More sharing options...
Liberty Posted July 7, 2015 Author Share Posted July 7, 2015 So if I own 240 shares of LBTYA should I have received 12 shares of LiLAK? At the close of trading today, July 1, 2015, Liberty Global distributed, as a dividend (or a “bonus issue” under U.K. law), to holders of its Class A, Class B and Class C ordinary shares as of 5:00 p.m. Eastern time on June 24, 2015 (the “record date”), one share of the corresponding class of LiLAC Group ordinary shares for each 20 Liberty Global ordinary shares held by each shareholder as of the record date. We distributed approximately 12.6 million LILA, 0.5 million LILAB and 30.8 million LILAK shares in total. Cash will be paid in lieu of fractional LiLAC Group ordinary shares. If you have LBTYA you should have received 12 shares of LILA. LBTYK gets LILAK. Link to comment Share on other sites More sharing options...
Buffetteer Posted July 7, 2015 Share Posted July 7, 2015 Thanks Liberty. Spoke to my brokerage, and yes I will be receiving the shares. As I haven't seen them added to my account yet I was somewhat concerned, but apparently it takes about two weeks for the transfer to take place. Link to comment Share on other sites More sharing options...
Liberty Posted July 7, 2015 Author Share Posted July 7, 2015 Thanks Liberty. Spoke to my brokerage, and yes I will be receiving the shares. As I haven't seen them added to my account yet I was somewhat concerned, but apparently it takes about two weeks for the transfer to take place. That seems slow. I'm with Interactive Brokers (in Canada) and think I got the shares on july 2. Link to comment Share on other sites More sharing options...
Buffetteer Posted July 8, 2015 Share Posted July 8, 2015 Whoa! I should switch, I'm with WebBroker. Link to comment Share on other sites More sharing options...
muscleman Posted July 8, 2015 Share Posted July 8, 2015 Sorry to ask a newbie question. Could anyone please tell me what the leverage ratio is calculated? Is that EBITDA/interest expense? Or total Debt/EBITDA? Link to comment Share on other sites More sharing options...
dwy000 Posted July 8, 2015 Share Posted July 8, 2015 Muscleman - it's the latter (Debt / EBITDA). The other one (EBITDA / Interest) is the Interest Coverage Ratio. Keep in mind as well that it's normally calculated off of Adjusted EBITDA - which adjusts for one off items and writedowns and (often) stock based comp. Link to comment Share on other sites More sharing options...
folivera13 Posted July 9, 2015 Share Posted July 9, 2015 Does anyone know if there are more recent filings on LILA than these? S-4: http://www.sec.gov/Archives/edgar/data/1570585/000119312514453670/d794201ds4a.htm Proxy: http://www.sec.gov/Archives/edgar/data/1570585/000119312514455700/d794201d424b3.htm Link to comment Share on other sites More sharing options...
folivera13 Posted July 9, 2015 Share Posted July 9, 2015 Does anyone know if there are more recent filings on LILA than these? S-4: http://www.sec.gov/Archives/edgar/data/1570585/000119312514453670/d794201ds4a.htm Proxy: http://www.sec.gov/Archives/edgar/data/1570585/000119312514455700/d794201d424b3.htm Also does anyone know if the $480mm Mike Fries mentions here is net of the minority interest? I think it is based on my calcs but just wanted to check! http://www.sec.gov/Archives/edgar/data/1570585/000157058515000030/a425script2-13x15lilac.htm Link to comment Share on other sites More sharing options...
Fat Pitch Posted July 9, 2015 Share Posted July 9, 2015 Does anyone know if there are more recent filings on LILA than these? S-4: http://www.sec.gov/Archives/edgar/data/1570585/000119312514453670/d794201ds4a.htm Proxy: http://www.sec.gov/Archives/edgar/data/1570585/000119312514455700/d794201d424b3.htm Also does anyone know if the $480mm Mike Fries mentions here is net of the minority interest? I think it is based on my calcs but just wanted to check! http://www.sec.gov/Archives/edgar/data/1570585/000157058515000030/a425script2-13x15lilac.htm I'm thinking it is net of minority interest as well. Does anyone here know the total PP&E LILAC currently has? According to this http://www.sec.gov/Archives/edgar/data/1570585/000157058515000101/exhibit991-trackerxq42014r.htm it is listed at 869mm, but I don't think it includes their latest acquisition. I'm rerunning my previous calcs and I'm realizing the FCF is a lot higher than what some (including I) has posted. This is looking very attractive, but you have risk exposure to the Chilean Peso. Link to comment Share on other sites More sharing options...
folivera13 Posted July 9, 2015 Share Posted July 9, 2015 Does anyone know if there are more recent filings on LILA than these? S-4: http://www.sec.gov/Archives/edgar/data/1570585/000119312514453670/d794201ds4a.htm Proxy: http://www.sec.gov/Archives/edgar/data/1570585/000119312514455700/d794201d424b3.htm Also does anyone know if the $480mm Mike Fries mentions here is net of the minority interest? I think it is based on my calcs but just wanted to check! http://www.sec.gov/Archives/edgar/data/1570585/000157058515000030/a425script2-13x15lilac.htm I'm thinking it is net of minority interest as well. Does anyone here know the total PP&E LILAC currently has? According to this http://www.sec.gov/Archives/edgar/data/1570585/000157058515000101/exhibit991-trackerxq42014r.htm it is listed at 869mm, but I don't think it includes their latest acquisition. I'm rerunning my previous calcs and I'm realizing the FCF is a lot higher than what some (including I) has posted. This is looking very attractive, but you have risk exposure to the Chilean Peso. I think you are using the 2013 numbers, but either way I have not seen numbers with Choice acquisition Link to comment Share on other sites More sharing options...
ni-co Posted July 10, 2015 Share Posted July 10, 2015 Does anyone know if there are more recent filings on LILA than these? S-4: http://www.sec.gov/Archives/edgar/data/1570585/000119312514453670/d794201ds4a.htm Proxy: http://www.sec.gov/Archives/edgar/data/1570585/000119312514455700/d794201d424b3.htm Also does anyone know if the $480mm Mike Fries mentions here is net of the minority interest? I think it is based on my calcs but just wanted to check! http://www.sec.gov/Archives/edgar/data/1570585/000157058515000030/a425script2-13x15lilac.htm I'm thinking it is net of minority interest as well. Does anyone here know the total PP&E LILAC currently has? According to this http://www.sec.gov/Archives/edgar/data/1570585/000157058515000101/exhibit991-trackerxq42014r.htm it is listed at 869mm, but I don't think it includes their latest acquisition. I'm rerunning my previous calcs and I'm realizing the FCF is a lot higher than what some (including I) has posted. This is looking very attractive, but you have risk exposure to the Chilean Peso. I think you are using the 2013 numbers, but either way I have not seen numbers with Choice acquisition As has been mentioned above in this thread, I think the numbers are including minority interest because Liberty would mention it if they were adjusted. The numbers are meant to show the operating performance of the whole business, not so much the value of the cash flows for shareholders, I think. The newest information I found is this presentation that has been linked here before: http://www.libertyglobal.com/pdf/presentations/LiLAC-Group-Presentation-June-2015-FINAL.pdf Keep in mind that their "OCF" numbers don't account for interest and tax payments, so it's closer to EBITDA. Link to comment Share on other sites More sharing options...
ni-co Posted July 10, 2015 Share Posted July 10, 2015 In regards to the spinoff, I think investors should be more excited about Charter than Liberty Global, and more excited about Global than LILAC. In terms of earnings growth, I think that Charter has the most potential. Charter is coming from a base with low penetration and poor operations. So it has a lot of potential from increased penetration, better customer service / less churn, etc. etc. Similarly, Global's assets have lower penetration than LILAC assets. They have a lot more room for growth. I also think that Rutledge is a better CEO than Fries. For example, Liberty Global customers hate their set-top box due to serious user interface issues and Global's MyPrime over-the-top service looks like it will fail. MyPrime has very poor reviews relative to Netflix if both services are available in a particular country. I've been thinking about your comment for a while. I think both companies are equally exciting for slightly different reasons. With Charter it's Rutledge's operating skills zoomed to "new Charter" that excites me. With LBTYA it's that 1. cable broadband is in its infancy in Europe and 2. the possibility of integrating European mobile networks with cable cos. There are so many opportunities for building scale and tons of cheap money around. And Malone is not only able to but actually makes good use of it. This is a climate which is really made for him. I own LBTYA, LILA, LBRDA and TC1 and owning those steadily growing, recession proof cash flows in this cheap financing environment makes me feel like a kid in a candy store. Link to comment Share on other sites More sharing options...
Liberty Posted July 13, 2015 Author Share Posted July 13, 2015 Looks like index funds might be done dumping LILA/LILAK... We'll know for sure over time. Link to comment Share on other sites More sharing options...
ni-co Posted July 13, 2015 Share Posted July 13, 2015 Looks like index funds might be done dumping LILA/LILAK... We'll know for sure over time. Some of them were dumped right into my hands. Gotta love spin-off dynamics (or tracking stock dynamics as "we were tutored to know") :) Link to comment Share on other sites More sharing options...
Liberty Posted July 14, 2015 Author Share Posted July 14, 2015 Looks like index funds might be done dumping LILA/LILAK... We'll know for sure over time. Some of them were dumped right into my hands. Gotta love spin-off dynamics (or tracking stock dynamics as "we were tutored to know") :) I still can't believe one of my orders was filled at 41 on friday morning :) In other news (via Bluegrass Capital), Digicel is filing for IPO in the region: https://www.sec.gov/Archives/edgar/data/1645826/000119312515236163/d946689df1.htm Potential target for LILAK? Maybe buying just some assets? Link to comment Share on other sites More sharing options...
ni-co Posted July 14, 2015 Share Posted July 14, 2015 Looks like index funds might be done dumping LILA/LILAK... We'll know for sure over time. Some of them were dumped right into my hands. Gotta love spin-off dynamics (or tracking stock dynamics as "we were tutored to know") :) I still can't believe one of my orders was filled at 41 on friday morning :) In other news (via Bluegrass Capital), Digicel is filing for IPO in the region: https://www.sec.gov/Archives/edgar/data/1645826/000119312515236163/d946689df1.htm Potential target for LILAK? Maybe buying just some assets? Nice. Looks interesting, thanks Liberty! Link to comment Share on other sites More sharing options...
Liberty Posted July 14, 2015 Author Share Posted July 14, 2015 Looks like index funds might be done dumping LILA/LILAK... We'll know for sure over time. Some of them were dumped right into my hands. Gotta love spin-off dynamics (or tracking stock dynamics as "we were tutored to know") :) I still can't believe one of my orders was filled at 41 on friday morning :) In other news (via Bluegrass Capital), Digicel is filing for IPO in the region: https://www.sec.gov/Archives/edgar/data/1645826/000119312515236163/d946689df1.htm Potential target for LILAK? Maybe buying just some assets? Nice. Looks interesting, thanks Liberty! I get the feeling that Digicel, CWC, LILAC, and Grupo Televisa will do all kinds of deals in the coming years... Link to comment Share on other sites More sharing options...
Ham Hockers Posted July 14, 2015 Share Posted July 14, 2015 Posted this in a separate thread but really meant here. To the people who own some of these Liberty tracking stocks: what is it you actually own when you own a tracking stock? Is it a bonafide, no shit, economic interest in a sub, but with no voting rights? Or is it more like a promise that your stock will participate in the economics of the sub? Link to comment Share on other sites More sharing options...
Fat Pitch Posted July 14, 2015 Share Posted July 14, 2015 Looks like index funds might be done dumping LILA/LILAK... We'll know for sure over time. Some of them were dumped right into my hands. Gotta love spin-off dynamics (or tracking stock dynamics as "we were tutored to know") :) I still can't believe one of my orders was filled at 41 on friday morning :) In other news (via Bluegrass Capital), Digicel is filing for IPO in the region: https://www.sec.gov/Archives/edgar/data/1645826/000119312515236163/d946689df1.htm Potential target for LILAK? Maybe buying just some assets? Digicel lost a bid to acquire Columbus that Cable & Wireless won. Malone owns ~11% of CVC. So what do you do if you own a scrappy cable operation that sits next to another system that has the backing of Liberty Global? IPO and hope to get a big equity multiple before you are taken out would be my game plan. Digicel's cost of debt looks really high too ~9%... that puts M&A out of reach especially if your competitor has access to cheaper capital. Malone is playing the scale business. Link to comment Share on other sites More sharing options...
ni-co Posted July 14, 2015 Share Posted July 14, 2015 Looks like index funds might be done dumping LILA/LILAK... We'll know for sure over time. Some of them were dumped right into my hands. Gotta love spin-off dynamics (or tracking stock dynamics as "we were tutored to know") :) I still can't believe one of my orders was filled at 41 on friday morning :) In other news (via Bluegrass Capital), Digicel is filing for IPO in the region: https://www.sec.gov/Archives/edgar/data/1645826/000119312515236163/d946689df1.htm Potential target for LILAK? Maybe buying just some assets? Digicel lost a bid to acquire Columbus that Cable & Wireless won. Malone owns ~11% of CVC. So what do you do if you own a scrappy cable operation that sits next to another system that has the backing of Liberty Global? IPO and hope to get a big equity multiple before you are taken out would be my game plan. Digicel's cost of debt looks really high too ~9%... that puts M&A out of reach especially if your competitor has access to cheaper capital. Malone is playing the scale business. The more I think about it the more I like LILA. Link to comment Share on other sites More sharing options...
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