Dee Valley Grp Share Discussion Threads

[redartbmud] 23/11/2016 07:57

Ex

Are you sure. Point of law that I don't see in the latest documentation.
If you are right then Svt and their advisors have made a huge strategic error.

[topvest] 23/11/2016 07:33

Severn Trent also think they are the best (as do most monopolistic water companies!) and so will not want to lose out in public. That would be a bit embarrassing for the Executive Directors. I would expect them to come back one more time with a knock-out blow, but lets see. Will take them a few days no doubt.

[exbroker] 22/11/2016 22:17

Greetings all
To clarify, SVT need to come back at at least 10% above the 1706 level to release AXA from the irrevocable to vote intention, and 15% to release Aviva, As it’s a scheme there will be no closing date so the bid from Ancala cant lapse it would be voted down at the meeting. SVT are a much bigger company with the benefit of quoted paper to use and more importantly they have operational efficiencies that Ancala being a financial buyer don’t have. I may be even more!!

[redartbmud] 22/11/2016 20:56

Praipus.

Bog standard response from Svt. An attempt to create a holding position. Time isn't on their side, but they have had access to confidential information and must have their own opinion of the true value, to them of, Dvw.
Axa, Aviva and Chelverton all signed shareholder irrevocable undertakings for the first offer by Ancala that included a 15% break clause. That was triggered by Svt's counter offer which was 15% above the Ancala offer.
As Chelverton has now accepted the revised Ancala bid I suspect that, when the first bid lapsed, the clause also lapsed. That would relate to all three parties.
Theoretically Svt could now bid £17.07 and win. It could go on forever in penny increments. Of course, it will not.

Who knows if Svt will come back, or alternatively another party steps into the ring.
Should that happen then any bid would clearly not have to exceed that 15% clause a second time.

Hope that is clear.
I am not a lawyer, just MHO.

[topvest] 22/11/2016 20:12

Think Severn Trent will come back with more, but its clear that they will have to pay a premium because of the regulatory risk associated with their bid.

RCV is £76m and debt is £50m. Equity value is £78.5m. Enterprise value at the offer price = £128.5m versus the Regulatory Capital Value ascribed by OFWAT of £76m = 69% premium.

Think Ancala could have gone for more than 1p more though...its definitely put the ball back into Severn Trent's court! Next step £18+?

[praipus] 22/11/2016 18:42

SVT advise shareholders to "take no action"re Ancala revised offer....

[praipus] 22/11/2016 17:18

Hmm Topvest what are you talking about?

£17.06 that sounds to me like "an Ancala cant really afford it" increase....

still no mention of a loan note alternative or dissenters register....plonkers IMHO

[redartbmud] 22/11/2016 17:08

16.38

Increased bid by Ancala. £17.06. The third bid accepted by the Dvw board.
Do they know which way to turn next?
Will the lovely Liv return with £17.07, and will the Dvw board accept that too?
Chelverton ditched their stake to Bidco, so they have run for the hills, with a wodge in their pockets. It means that they don't have to wait for the sausage machine to grind to the end of the rainbow. Their books will look better at the year end.

It seems that those who wanted an increased bid have got their way after all! I was wrong guv.

[topvest] 21/11/2016 19:37

Interesting - thanks. So the bid is at 70% premium to RCV if you add back the £50m of debt.

[praipus] 21/11/2016 14:39

I've tried contacting various parties about "Loan Note Alternative to cash" and "Dissenters Register" apparently usually with a scheme of arrangement these are not made available.

However I was given the impression it would be wise to contact both DVW and SVT requesting an interest in these as both would enable any shareholder with an unexpected CGT liability a method of spreading/reducing the liability by cashing portions of the loan notes or accepting the offer in smaller quantities of shares over different tax years.

[redartbmud] 21/11/2016 13:08

Praipus

Thanks for the information.

red

[praipus] 21/11/2016 12:08

Thanks redartmud...fools rush in etc

Presentation on the DVW offer on the SVT website? Scroll down...

[redartbmud] 21/11/2016 11:39

Hope the purchase works out for you.

[praipus] 21/11/2016 10:58

Ditto, followed exBroker and bought a few more:)

[topvest] 18/11/2016 20:55

Happy to hold and wait myself. I'll be patient.

[linhur] 18/11/2016 10:01

I expect Ancala together with AXA and Aviva are waiting for the Competition and Merger Commission's report which should be in 40 days time unless they want to prolong it with a detailed review.

I note SVT are playing the Welsh card by asking for a Welsh water licence. There are a number of Welsh organisations who have to be consulted on a regular basis. I see SVT are also pushing their "customer having lower bills ploy" which will not leave much for shareholders who will have to have a "rebasing of dividends" to offset the increase in borrowings.

I expect SVT will put in a further "10% bump clause" to deter further competitors from entering the fray.

It might be worth considering cashing in, as this story could stretch well into 2017. There is little prospect of any dividend (normally paid in January) whilst the battle is still ongoing.

Linhur

[topvest] 17/11/2016 20:32

I'm not sure the original bidder have declared their hand yet. Is that right?

[redartbmud] 17/11/2016 16:22

Praipus

An interesting thought, but it would be easy enough for them to say that Dvw does not fit their business model for xyz reasons. It is their choice, whether or not to bid, and they don't need to publicly state their position.

[praipus] 17/11/2016 15:30

Interesting point redartbmud. So UU might have to bid to show that they are not in a concert party with SVT? Regulator might not be happy if they were.

[exbroker] 17/11/2016 08:36

Hi Praipus
Given the number of Rule 8.3 in this stock from private individuals I expect you are not alone in wanting to defer a CGT liability. I suggest you talk to the advisers to SVT or ring them direct, after all you would expect the big three holders to take cash so a max of £35M worth of shares or loan notes is not much to them given the size they now are. I bought the stock at 1700 in the auction, I will loose a small amount of money after stamp and comm if the deal goes through at this level, I have a few from before the counter so will show a profit regardless.
Interesting there are NO intentions to vote in favour of the Scheme from the big 3 holders, all of whom signed up for the original bid with the standard 10% bump clause.

[redartbmud] 17/11/2016 08:32

SVT and UU now have a joint venture for business water. Are Uu going to rock the boat over a company valued at $78m?

[praipus] 16/11/2016 21:25

Very difficult to replace a long term holding providing:
1) Index linked income
2) "Index linked regulated" asset growth
3) Monopoly customers i.e. can't choose between suppliers effectively no competition for obvious reasons
4) Economic growth "we need more housing" = more water connections = more customers

Using Tobins Q (ADVFN figure).64 as a guide I get £29.16 but personally I dont want to sell because of 1-4 above.

Loan notes*, cash and or shares in the new company SVT (for example) would help IMHO.

*Loan notes I think are important to help Private Shareholder especially long term company employees or retirees who might suddenly have a CGT issue which they didnt vote for in the first place. By taking loan notes they could mitigate CGT by cashing in over time. I'm assuming this is still an accepted way to manage CGT liability?

[topvest] 16/11/2016 20:57

Yes, all looks very promising. I don't feel the Severn Trent bid at £17 is a knock-out blow and so we will have to see if Ancala Fornia comes back with a bit more. I agree that there is still potential for a few more pounds on the price, so lets see. What's fair value? Probably £20 I would guess.

[praipus] 16/11/2016 18:20

Rubbish at £78m, it works out SVT are paying £288 pounds for each customer.

Each customer will pay them cash every month for the rest of their lives...and then their children and then their children and so on for infinity.

Wake up! If you redartmud are a DVW shareholder you are being robbed.

Index linked income and asset growth v a one off payment 20% above average share price doesn't replace it IMHO especially without a loan note or similar capital gains tax mitigating alternative.

SVT I suspect is a better fit than Ancala from an employees perspective benefits, training, security, career prospects etc. That said I dont know what UU. or Welsh Water or PNN or any other utility might offer.

[redartbmud] 16/11/2016 16:08

The price looks a bit full to me, in a regulated market. Not much skin on the bone for a rival to bite into.
In the circumstances, perhaps you should count yourself lucky that Svt stepped in at the 11th hour.