Munger_Disciple Posted January 14, 2019 Share Posted January 14, 2019 Currently Millicom pays 4% dividend annually which I think will be eliminated if this deal goes thru'. So Liberty can take on more debt to do the deal and fund it with the money that currently goes towards Millicom dividend. Link to comment Share on other sites More sharing options...
Munger_Disciple Posted January 14, 2019 Share Posted January 14, 2019 https://www.reuters.com/article/us-millicom-m-a-libertylatinamerica-excl/exclusive-liberty-latin-america-in-bid-to-acquire-millicom-sources-idUSKCN1P820D?il=0 In addition to borrowing from banks, Liberty Latin America is considering raising financing from an investment firm, such as a private equity fund, for the cash portion of its bid, another of the sources said. Link to comment Share on other sites More sharing options...
Spekulatius Posted January 14, 2019 Share Posted January 14, 2019 Hopefully, shareholders won’t get screwed over like with the C&W merger. Millicom appears to be far larger than LILA, so shareeholders will hold only a minority share of the combined company. Link to comment Share on other sites More sharing options...
WayWardCloud Posted January 14, 2019 Share Posted January 14, 2019 Mobile is 58% of revenue, "Home" is 25% and Business 16%. It will all come down to price and I really hope they're not paying anywhere >7x for such a mix. It will really strengthen Liberty in Panama and Costa Rica since they're already present in those countries (fingers crossed for no anti-trust). Anyone has color on the quality of their broadband network? Is it all HFC Cable or is there some DSL in the mix? Exciting times! Link to comment Share on other sites More sharing options...
Munger_Disciple Posted January 15, 2019 Share Posted January 15, 2019 Bloomberg article on the deal: https://www.bloomberg.com/opinion/articles/2019-01-15/millicom-could-deal-with-debt-from-john-malone-liberty-purchase Link to comment Share on other sites More sharing options...
afm408 Posted January 15, 2019 Share Posted January 15, 2019 Hopefully, shareholders won’t get screwed over like with the C&W merger. Millicom appears to be far larger than LILA, so shsreholders will hold only a minority share of the combined company. Good news is LILAK shareholders are on the same side as malone, vs. with C&W they were on the opposite side of him (he owned much more C&W via Columbus merger than he did LILAK). Also, Millicom is much bigger, but given the large cash component that can come from leverage (especially post synergy EBITDA), LILAK will end up owning a significant majority of the combined co. Plus, they can sell the African assets of Millicom, which would probably generate $1b. Link to comment Share on other sites More sharing options...
meiroy Posted January 16, 2019 Share Posted January 16, 2019 Hopefully, shareholders won’t get screwed over like with the C&W merger. Millicom appears to be far larger than LILA, so shsreholders will hold only a minority share of the combined company. Good news is LILAK shareholders are on the same side as malone, vs. with C&W they were on the opposite side of him (he owned much more C&W via Columbus merger than he did LILAK). Also, Millicom is much bigger, but given the large cash component that can come from leverage (especially post synergy EBITDA), LILAK will end up owning a significant majority of the combined co. Plus, they can sell the African assets of Millicom, which would probably generate $1b. So he intentionally fucked the shareholders for his own benefit? Qualitatively, this is reason enough not to own this. It's so much cheaper now, though... Link to comment Share on other sites More sharing options...
NewbieD Posted January 16, 2019 Share Posted January 16, 2019 What about buying Millicom here? Seems like the markets estimation of price level and/or probability of closing is not that high. I would think any offer would need to be at least $80 to be accepted. What is the base rate probability of Malone following through on a company he has expressed this level of interest in? Link to comment Share on other sites More sharing options...
afm408 Posted January 16, 2019 Share Posted January 16, 2019 Hopefully, shareholders won’t get screwed over like with the C&W merger. Millicom appears to be far larger than LILA, so shsreholders will hold only a minority share of the combined company. Good news is LILAK shareholders are on the same side as malone, vs. with C&W they were on the opposite side of him (he owned much more C&W via Columbus merger than he did LILAK). Also, Millicom is much bigger, but given the large cash component that can come from leverage (especially post synergy EBITDA), LILAK will end up owning a significant majority of the combined co. Plus, they can sell the African assets of Millicom, which would probably generate $1b. So he intentionally fucked the shareholders for his own benefit? Qualitatively, this is reason enough not to own this. It's so much cheaper now, though... Yes, although I think he would probably say that he was maximizing the value for CWC shareholders, the side that he was on, which I think is normal in any M&A transaction. Regardless, it has long been John Malone's MO to try screw the other side of the table for his own benefit. Every deal is fraught with complexity, which is meant to stack the odds in his favor (e.g. look at a case study of the original Liberty spin). If you have issues with this you should not own any liberty entities. However, history has shown that if you are on HIS side of the table, you benefit enormously and compound at very high rates. So I think following the money, often through complexity, is very important. And, in this situation (as opposed to CWC, but similar to many other Liberty home runs), you are on his side of the table. Link to comment Share on other sites More sharing options...
afm408 Posted January 16, 2019 Share Posted January 16, 2019 Hopefully, shareholders won’t get screwed over like with the C&W merger. Millicom appears to be far larger than LILA, so shsreholders will hold only a minority share of the combined company. Good news is LILAK shareholders are on the same side as malone, vs. with C&W they were on the opposite side of him (he owned much more C&W via Columbus merger than he did LILAK). Also, Millicom is much bigger, but given the large cash component that can come from leverage (especially post synergy EBITDA), LILAK will end up owning a significant majority of the combined co. Plus, they can sell the African assets of Millicom, which would probably generate $1b. So he intentionally fucked the shareholders for his own benefit? Qualitatively, this is reason enough not to own this. It's so much cheaper now, though... Yes, although I think he would probably say that he was maximizing the value for CWC shareholders, the side that he was on, which I think is normal in any M&A transaction. Regardless, it has long been John Malone's MO to try screw the other side of the table for his own benefit. Every deal is fraught with complexity, which is meant to stack the odds in his favor (e.g. look at a case study of the original Liberty spin). If you have issues with this you should not own any liberty entities. However, history has shown that if you are on HIS side of the table, you benefit enormously and compound at very high rates. So I think following the money, often through complexity, is very important. And, in this situation (as opposed to CWC, but similar to many other Liberty home runs), you are on his side of the table. And just to clarify, he screwed LILAK shareholders, of which he owned 2%, for the benefit of CWC shareholders, of which he owned 25%. This was all disclosed in filings and it was clear where his interests lay. That being said, he did it for all equity because he believed in the LILAK equity. And, he has since bought more on the open market, at prices meaningfully higher than today's. Link to comment Share on other sites More sharing options...
Jurgis Posted January 16, 2019 Share Posted January 16, 2019 Hopefully, shareholders won’t get screwed over like with the C&W merger. Millicom appears to be far larger than LILA, so shsreholders will hold only a minority share of the combined company. Good news is LILAK shareholders are on the same side as malone, vs. with C&W they were on the opposite side of him (he owned much more C&W via Columbus merger than he did LILAK). Also, Millicom is much bigger, but given the large cash component that can come from leverage (especially post synergy EBITDA), LILAK will end up owning a significant majority of the combined co. Plus, they can sell the African assets of Millicom, which would probably generate $1b. So he intentionally fucked the shareholders for his own benefit? Qualitatively, this is reason enough not to own this. It's so much cheaper now, though... Yes, although I think he would probably say that he was maximizing the value for CWC shareholders, the side that he was on, which I think is normal in any M&A transaction. Regardless, it has long been John Malone's MO to try screw the other side of the table for his own benefit. Every deal is fraught with complexity, which is meant to stack the odds in his favor (e.g. look at a case study of the original Liberty spin). If you have issues with this you should not own any liberty entities. However, history has shown that if you are on HIS side of the table, you benefit enormously and compound at very high rates. So I think following the money, often through complexity, is very important. And, in this situation (as opposed to CWC, but similar to many other Liberty home runs), you are on his side of the table. And just to clarify, he screwed LILAK shareholders, of which he owned 2%, for the benefit of CWC shareholders, of which he owned 25%. This was all disclosed in filings and it was clear where his interests lay. That being said, he did it for all equity because he believed in the LILAK equity. And, he has since bought more on the open market, at prices meaningfully higher than today's. Malone took LILA shares for his CWC holdings during the merger. And then LILA dropped a lot after the merger. So you could say that he screwed himself... ::) Link to comment Share on other sites More sharing options...
Liberty Posted January 16, 2019 Author Share Posted January 16, 2019 People seem to assume that Malone is omniscient. He's very good, but he makes mistakes too. Same with LBTYA, which I'm pretty sure didn't turn out how he wanted to. Link to comment Share on other sites More sharing options...
afm408 Posted January 16, 2019 Share Posted January 16, 2019 People seem to assume that Malone is omniscient. He's very good, but he makes mistakes too. Same with LBTYA, which I'm pretty sure didn't turn out how he wanted to. Omniscient, definitely not. Nobody is, including Buffett (Dexter Shoe, Gen Re, etc). But, I'd generally consider the odds of making money being aligned with him much higher than most other people out there. Link to comment Share on other sites More sharing options...
EricSchleien Posted January 16, 2019 Share Posted January 16, 2019 For those interested in learning more about John Malone, there's a chapter devoted to him in the book "The Outsiders". There's also a book about him which was great called "Cable Cowboy". He's the real deal. Last year I had the pleasure of attending a Major League Baseball game with one of the owners of the team. I was a Braves shareholder so I started asking him about the business of baseball, tax implications, the Forbes valuations, etc. When I asked him about John Malone, he told me he was actually friends with him and that they own houses near each other. He said he could personally attest to the fact that he's a genius and that the Braves, in particular, were an incredibly run organization. You can that for what it is. Those books, however, are a truly fantastic look into Malone who does things very differently than say your typical value investor like Buffett. Link to comment Share on other sites More sharing options...
SHDL Posted January 16, 2019 Share Posted January 16, 2019 Regardless, it has long been John Malone's MO to try screw the other side of the table for his own benefit. Every deal is fraught with complexity, which is meant to stack the odds in his favor (e.g. look at a case study of the original Liberty spin). If you have issues with this you should not own any liberty entities. However, history has shown that if you are on HIS side of the table, you benefit enormously and compound at very high rates. So I think following the money, often through complexity, is very important. And, in this situation (as opposed to CWC, but similar to many other Liberty home runs), you are on his side of the table. This is really fundamental when it comes to investing in anything Liberty/Malone related. I love watching/listening to what they do/say, and I greatly admire their skills, but I've never felt comfortable really trusting them with my money. Link to comment Share on other sites More sharing options...
Munger_Disciple Posted January 16, 2019 Share Posted January 16, 2019 Unlike the LILA/CWC deal, Malone is not involved in Millicom. He owned the super voting shares of Liberty Global which negotiated the deal with CWC where he also owned a big chunk of the stock. Millicom on the other hand is controlled by the Stenbeck family and CEO Mauricio Ramos is an outstanding manager (far superior to LILA management in my opinion). Ramos ran Liberty Chilean operations before becoming CEO of Millicom in 2015. So they understand the Malone playbook and any deal is likely to be fair to Millicom shareholders. Link to comment Share on other sites More sharing options...
WayWardCloud Posted January 16, 2019 Share Posted January 16, 2019 Some notes after watching the Nasdaq introduction conference - I'm VERY impressed with Mauricio Ramos. Is there a chance he could lead the whole company operationally going forward and Malone lets Balan Nair focus on M&A (Sorry Balan!)? It would make sense since he's been doing so great running Millicom's assets, which are going to be the majority of the new company's assets, plus he used to run old LILA (Chile + PR) so he already knows those two well. - Their broadband mix is >90% HFC docsis 3.0 (to answer my own question from a few posts ago) BUT their average customer only pays for 5Mb speed (!!). They have a lot of marketing power thanks to their ability to upsale speeds from 5 to 1000 with little (no?) added capex. - They have a very interesting FinTech under "services" operations doing micro-lending in several of their countries under the Tigo brand but management expresses desire to focus on cable + 4G convergence execution for now. - When it comes to Panama they can't say it but it is very clear they're anticipating a merger with Liberty's assets and are excited about joining forces there. Link to comment Share on other sites More sharing options...
rogermunibond Posted January 17, 2019 Share Posted January 17, 2019 Let's remember that Malone first screwed over UGC shareholders when he merged with them back in 2005. But the Schneiders were terrible stewards of shareholder value. Link to comment Share on other sites More sharing options...
Munger_Disciple Posted January 17, 2019 Share Posted January 17, 2019 Let's remember that Malone first screwed over UGC shareholders when he merged with them back in 2005. But the Schneiders were terrible stewards of shareholder value. It is a very valid concern. You just never know with Malone entities. That is one thing I like about Berkshire and prefer it greatly over Liberty entities. There is no doubt as to whose interests are foremost on management's mind with Berkshire. There is no special deals for CEO or Chairman at Berkshire. I really think Malone should follow Buffett's example going forward. He should treat all his shareholders fairly and worry more about about his legacy than making $$ off his own shareholders. Link to comment Share on other sites More sharing options...
skanjete Posted January 22, 2019 Share Posted January 22, 2019 Does anyone know what the economic versus voting share is that Malone controls? Link to comment Share on other sites More sharing options...
Liberty Posted January 22, 2019 Author Share Posted January 22, 2019 https://www.marketwatch.com/story/liberty-latin-america-kills-millicom-talks-2019-01-22 Link to comment Share on other sites More sharing options...
spark411 Posted February 1, 2019 Share Posted February 1, 2019 Genesis Asset Management reports 11.79% passive stake. Hope earnings are good and the stock reflects true value. Saw that they received insurance proceeds. Will be interested to see what they do with those funds. Link to comment Share on other sites More sharing options...
Liberty Posted March 26, 2019 Author Share Posted March 26, 2019 https://www.businesswire.com/news/home/20190326005452/en/Liberty-Latin-America-Acquire-Controlling-Stake-UTS Link to comment Share on other sites More sharing options...
walkie518 Posted May 8, 2019 Share Posted May 8, 2019 down a fair amount today ... pricing could be compelling though not sure where or how to price presentation: http://www.lla.com/PDF/presentations/LLA-Q1-2019-Investor-Call-Presentation.pdf what I don't understand is why Liberty Global, for example, opted to sell all assets and concentrate regionally while LILA seems to be expanding its reach... even looking at Charter's assets, these services tend to be regional duopolies with marginal scale outside of the foothold? Maybe LBTY is very cheap here, maybe British competition is fierce ... Maybe LILA is cheap here but deserves a discount to more geographically concentrated players of scale like Charter? If so, how much to own small, regional monopolies? I suppose content licensing can be shared across regions in a single deal? Link to comment Share on other sites More sharing options...
meiroy Posted May 9, 2019 Share Posted May 9, 2019 down a fair amount today ... pricing could be compelling though not sure where or how to price presentation: http://www.lla.com/PDF/presentations/LLA-Q1-2019-Investor-Call-Presentation.pdf what I don't understand is why Liberty Global, for example, opted to sell all assets and concentrate regionally while LILA seems to be expanding its reach... even looking at Charter's assets, these services tend to be regional duopolies with marginal scale outside of the foothold? Maybe LBTY is very cheap here, maybe British competition is fierce ... Maybe LILA is cheap here but deserves a discount to more geographically concentrated players of scale like Charter? If so, how much to own small, regional monopolies? I suppose content licensing can be shared across regions in a single deal? walkie, you have mistakenly posted a link to a fashion magazine. This is one of the most annoying things I have ever seen. Link to comment Share on other sites More sharing options...
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