Colt Telecom Share Discussion Threads

[dickbush] 19/6/2015 17:46

Note the comment that Fidelity owns 62%. Without trawling through the 2014 Report and Accounts again, that's about what I thought it was.

According to the back of my envelope, if Fidelity bought circa 200 million shares at 83 1/2p back in early 2009, and bought out the current minority (circa 330 mil) at 190p they could make the same (in Sterling) as the £3 a share they were reportedly looking for some 10 years ago - if they could catch a buyer for the lot at £2.10. Anything above that, and why wouldn't it be, is just cream on top. As Private Eye would say, Trebles All Round. Except, of course, for you and me, the minority shareholders.

[robwt] 19/6/2015 17:30

We are in the dark on what fidelty are doing, but they will win no plaudits with their handling of Colt. I feel sorry for the poor suckers who have their pensions invested in any of Fidelity's poor performing funds. They have a few winners, but that is for the luck few.

The only good thing about this can only be the gigantic lesson we have all learned, don't invest in any company where the majority of shares are being held by a small investor eating behemoth.

It hurts a bit, I hope there is a counter offer...but either way I will be glad to be out.

[estienne] 19/6/2015 16:48

Fidelity have a buyer and are waiting to sell their stake but at a much higher price. They want to take complete control so that they can reap the profits we've all waited so long for.

[robwt] 19/6/2015 14:29

As I write, there will be talks going on within the sector, that Colt is being bought on the cheap. Fidelity have been hoovering up Colt shares for the last twelve months and this is a great time to strike, shame they couldn't come up with 200p a share.

I am sure that there will be bidder in the next ten days with an offer of 10 or 15% above the 190p. Can't be anymore than hopeful that there are players who see Colt as cheap as chips.

[dickbush] 19/6/2015 12:17

dealy

I traded long below 118p last year. But 190p doesn't make me the least bit happy about my core holding even though I want to get out of the market completely.

This bid price and its timing looks to me like Fidelity rushing to acquisition before anyone else can see the improvement in the company's prospects for 2014 and beyond.

[dealy] 19/6/2015 12:14

thanks Palace.

A bid could still emerge - just because it hasn't before doesn't mean it won't. Sector M&A is booming right now.

[palace andy] 19/6/2015 11:37

Some snippets from Citigroup

* Fidelity entities already own 66.6% of Colt and it says it has received
irrevocable undertakings to accept the offer for another 70.15m shares
(7.8%). Fidelity needs to request the board convene an EGM for a
shareholder vote to remove the relationship agreement which stipulates it
cannot go above 75% (approval requires a majority of the independent
shareholder votes cast). Subject to the removal of the relationship
agreement Fidelity needs 80% to delist Colt and 95% to squeeze out.

*This move comes as something of a surprise since Colt acquired its
sister company KVH only in December 2014 for EUR130.3m. KVH was wholly
owned by Fidelity and so the transaction effectively moved part of KVH
into the public arena - not a natural move prior to taking Colt private
in our view.

We rate Colt Buy with a target price of 175p which this offer exceeds.
Our Buy case on Colt is predicated upon its asset value, a result of
heavy investment over many years which the company has consistently
fallen short of converting into strong financial performance. We have
hopes though that the corporate restructuring being advocated by the new
CFO would bring benefits in due course. In our view independent investors
might be justified in thinking that Fidelity is not acting on a purely
altruistic basis but also that they are unlikely to get a better offer.
There is a small chance that this offer flushes out a trade bid, but
given the length of time that the company has been available for an
approach we would not place a high probability on this.

[dealy] 19/6/2015 11:34

let's not gripe too much. 190p isn't the end of the world. we are down at 118p in October. £ is also very strong. But I do believe the long term value of Colt with its unique footprint and also its tax losses is above 250p. Best thing would be DTAG or BT just coming in and making an offer. Nothing stopping them doing that next week.

[palace andy] 19/6/2015 10:56

As I expected with Simon Haslam spending more time at Colt. I can't see that Fidelity want to do anything but sell. I would like to think that they want to do this quickly but the price is not at a level that would get a reasonable offer. By making this bid, perhaps they hope it will force someone's hand to make that reasonable offer.

Going private for a year or so helps to get the company ready for an improved offer, but if someone were to buy in a year or two, why not do it now at what is probably going to be a lower price than Fidelity would want later on?

If it does goes private, then to DB's point, lesson learnt never to invest in a company with a majority owner.

[dickbush] 19/6/2015 10:43

Agreed.

The share price was moving up very nicely recently and I'm sure-if the 2nd qtr were to show the result I expected-there was the real possibility that the share price would be at a new high immediately afterwards.

[dealy] 19/6/2015 10:40

Fidelity might even be trying to flush out a bid for the whole company by doing this.

[robwt] 19/6/2015 10:27

Canny move by Fidelity to steal the company. Still, it is nice to see some action.

[dickbush] 19/6/2015 10:06

The statement that the 190p bid is a 35% premium to the share price OVER THE LAST YEAR is self serving. It is slightly more than a 20% premium over the close yesterday and less than 20% above the very recent peak of 160p. Any way that you look at it, it is derisory.

I just hope that someone comes in with a bid 10% plus higher to, at least, publicly embarrass Fidelity.

[dickbush] 19/6/2015 09:58

From Telecompaper

Fidelity makes buy-out offer for Colt
Friday 19 June 2015 | 09:04 CET | News

Colt's largest shareholder Fidelity Investments has made an offer to take the European carrier private. However, Colt's independent shareholders said the bid of 190 pence per share undervalues the group, and a sale to a third party could achieve a higher price. Colt said the directors' assessment was based on its new business plan, which has been provisionally approved by the board and further details of which will be announced soon.

While the independent directors, having been so advised by Barclays, consider the financial terms of the offer not fair to the shareholders of Colt, they also recognised that some shareholders may be interested in accepting the bid. Accordingly the board has made no recommendation to shareholders whether or not to accept the offer. Furthermore Fidelity has stated that it will not sell its shares in Colt before the end of 2016, so the immediate offer to cash-out may appeal to some shareholders. As a result Colt's board said it would convene a meeting of shareholders to consider the offer.

Fidelity, which has supported Colt since its creation, said its offer also takes into account Colt's business plans and offer shareholders a premium of 35 percent on the average share price in the past year. In total its offer values Colt at GBP 1.72 billion. It already has the support of holders of 7.8 percent of Colt's shares, in addition to its own shares in the operator.

[dickbush] 19/6/2015 09:30

dealy, IMO if Fidelity were trying to elicit a higher bid, they would be waiting until the better 2nd qtr figures I expected were announced, showing the company's EBITDA was on course for an almost total recovery. I hope I'm wrong but this is my view...

Fidelity took the p*ss in 2009 with the Offer For Sale at 83 1/2p rather than a Rights issue, although, then at least, shareholders had an equal shot at the deal.

Fidelity's bid is a steal, well below any bid we might expect from a third party at a time when bidding activity within the sector is rampant. I cannot believe that, in this environment, Fidelity has not been contacted about selling out.

All we can do is vote against and, given Fidelity's (supposed) unwillingness to sell shares before December 31st 2016, wait another couple of years for a much better bid. Of course, since Colt's senior management is employed by Fidelity, it can produce poor figures to depress us further and surrender.

IMO this is Fidelity proving that they are hard-nosed businessmen willing to do what the law allows them to do: make a load of money for themselves at the cost of Colt's minority shareholders.

The lesson is: don't ever invest in a share where there is a majority shareholder.

[dealy] 19/6/2015 08:36

definitely undervalues the company. chance of a counter bid for the whole lot? another vc offering 225? could happen. watch to see if we close over 190p

[dealy] 19/6/2015 08:04

190p. cheeky. shareholder structure makes it difficult for minority shareholders to get more value.

[robwt] 17/6/2015 11:53

At 11.30 this morning no one was selling Colt shares. The shares seem to have all but dried up.

With another banking mess up this morning with RBS customer payments gone missing, surely Colt should be pushing their services. According to an expert interviewed on Radio 4 the financial sector is operating with outdated IT.

[dickbush] 11/6/2015 08:44

My view, too. It needs to close above 158.1. Maybe not today. The market's very quiet so far.

[estienne] 11/6/2015 08:32

It seems to be breaking out!

[dickbush] 02/6/2015 13:55

I'm hoping for a very positive y/y EBITDA comparison for the 2nd qtr, which would help the valuation. Meanwhile, the Euro/$ chart is looking healthier and, hopefully, the Euro/Sterling will improve, too. That would also help. I'd like to see both developments before the haggling begins over a bid price.

[dealy] 02/6/2015 07:17

Pretty sure it's now or never for the Colt takeover story. Level of activity is very high.