Dee Valley Grp Share Discussion Threads

[topvest] 06/12/2016 19:57

Yes, I've accepted the Severn Trent bid myself...reluctantly!

[ellie15] 06/12/2016 18:40

Interesting article on wrecsamplaid.blogspot.co.uk published on Sunday, not encouraging as I live in the DVW supply zone. Will Ancala come back with an offer and SVT counter bid? Doubtful, it will all be on the shareholders meetings now, as a group there's still potential for the shareholders to control the outcome which must be why I'm getting glossy leaflets without substance trying to sway opinion from SVT

[exbroker] 06/12/2016 16:42

Greetings Praipus et al
The question is will Ancala top the SVT offer and then how long before SVT top them and buy stock from the big holders?
Svt have to be the winner, they are bigger and they are the industry player not a financial player, the cost advantage is considerable.

[mikelowndes] 05/12/2016 20:06

redgog - 'Mike I did work for the company in the 70+80s,your Taid was well respected by all ( Mr Lowndes) along with the MD Mr Seddon.'- that's very nice to know. He was one of the most scrupulously honest people I have known, and a great Taid. Here's a piccy of him from 1952 (on the left - well you'd know that) from Nat. Lib. Wales: hxxp://hdl.handle.net/10107/1462608 (you'll need to fix the xx in the link!)
If you have any more info on the context of this pic please share!

Praipus - Thanks for the info on Ancala. I agree with the last 3, none of us really want this to happen, but the first two are non-issues (ask the customers!).

ellie15 - yes its easy to forget the merger with Chester.

topvest - it seems to me they've deliberately kept it local, never have I read such erm, conservative and cautious Annual Reports over the years... which comes across as unambitious... But, steady sustainable growth.

[ellie15] 05/12/2016 19:50

Don't really want to detract from the main subject of the thread but have a few points as someone who has had the opportunity to visit the DVW sites which constitute more than Wrexham scrubland. Treatment works in CHester, half of site is operational, other half are offices and storage yard/ buildings so prime development land. Land in Handbridge - opportunity to sub-divide and again, develop. Other land which is operational, opportunity for hydro powered renewable energy.
Also, since the PR14 review, a new Board was put in place who have since made many changes recognised by OFWAT in customer service and operational areas.
I'd rather keep my shares so perhaps let Ancala buy up 51% from those who want to sell and those who don't get to keep their dividends?
SVT opportunities, already stated a reduction in head count so yes, for those people there is somewhere to go but not where they'd want to!
From my own perspective, I won't be voting for SVT

[hindsight_speculator] 05/12/2016 18:53

Land bank - there is none to justify an enhanced valuation. There are a few scrubby bits of agricultural land in the Wrexham area fit only for grazing upland sheep. The other land assets are all operational.

There are also no undervalued assets. Regulatory accounts used to require a current cost valuation of all assets. The majority of the value is in the network which can never be disposed of by definition.

[topvest] 05/12/2016 10:28

Praipus - its not quite as rosy as you make out in my view.

First of all its not an RPI indexed income stream forever. OFWAT have already announced a move to CPI going forwards with a mix of RPI and CPI for a while.

Secondly, they have a lucrative waste water commission contract that is not guaranteed long term.

Thirdly, the onset of retail competition is likely to be negative for the small players and fourthly they were the worst performing PR14 water company from a business plan perspective.

Think the Severn Trent offer is about it to be honest. Rather keep my Dee Valley shares, but its no longer a derisory offer.

[praipus] 05/12/2016 09:24

"What makes you so antagonistic towards Ancala?"

* No economies of scale for customers to benefit from
* No where for employees to go within the organisation
* No possibility of continued share ownership as not a public company
* Offer far too low, remember you are giving away an RPI ndex linked income forever!
* No loans notes for long term holders who may have a capital gain to mitigate.

Agree with ideally keeping DVW as it is but suspect regulation or legislative change in future could make water extremely expensive for the company and its customers and a knowledgeable holding company like UU. or SVT or PNN could make changes efficiently and at lower cost for customers.

I dont know the structure of Welsh Water but could they make a bid?

It would be interesting to know the real reason for the insurance company wanting out now.

SVT offer so far seems logical and offers more compensation for the loss of index linked income, historically undervalued assets and landbank.

[redgog] 03/12/2016 22:43

The company has a particular voting system for shareholders.

This means that Severn and trent will have to gain 75% of voting shareholders as well as 75% of shareholding by actual number of shares.

voting no may be a way for small shareholders like us, to hang on to their growing dividend returns, and to keep the company local.

Mike I did work for the company in the 70+80s,your Taid was well respected by all ( Mr Lowndes) along with the MD Mr Seddon.

[ellie15] 03/12/2016 18:48

Would prefer to keep my shares and no doubt have growth on my returns, £18.25 per share is too cheap for a Company that will only develop and grow in the future, looking at its operational and customer performance over the last 2 years it looks as though the new CEO has made a lot of changes but stil retained the Company's local identity and workforce which can only bode well For future dividend increases. Unless shareholders are looking to cash in short term, DVW looks to be a safe bet for the future in its current setup.

[hindsight_speculator] 03/12/2016 10:55

mikelowndes - I believe your dad was Co. Sec. of the Wrexham company in the 70s/80s.
I too would prefer all the operations to remain at Wrexham, providing a local service for local customers. I don't own many shares so it makes little difference to me.

[mikelowndes] 02/12/2016 19:16

'Bodes well for the employees of both companies' Really? A small company like that will have a lot of replicated management structure /and/ support staff and systems that would be 'rationalised' by a larger company with efficiencies of scale. As a long term shareholder (plus my Taid pretty much ran the company for a time) I'd prefer them to stay local and would take a lower offer (if forced to sell my shares at all). Not sure enough of my fellow holders give a damn though. What makes you so antagonistic towards Ancala?

[hindsight_speculator] 01/12/2016 17:37

See post 380.

[redartbmud] 25/11/2016 20:03

Doubt Ancala can pick ny up now, especially in volume anyway.

[praipus] 25/11/2016 17:24

Thanks. I agree SVT have been quick to respond to shareholders. Bodes well for the employees of both companies. Always good to work for/with a company that can make quick decisions.

Ancala having another go must be possible, speaks volumes that they havent responded and are leaving the lower level offer open to pick shares up off of the unwary and or vulnerable on the cheap.

[redartbmud] 25/11/2016 15:26

Praipus

Good news. Well done.
SVT have been quick out of the blocks. Liv doesn't hang about.
What chance Ancala coming back again?

[praipus] 25/11/2016 13:50

Red great news re Loan Notes

[praipus] 25/11/2016 13:49

Zeppo, stay with us on the journey man, Exbroker says never too late....at £18.15 or less SVT t/o offer tabled at £18.25 at the moment!

The overseas contingent (we "£" must look cheap) haven't even tipped up yet YTL Power, Macquarie Group, Kohlberg Kravis Roberts & Co. L.P. (KKR), Capstone Infrastructure Corporation, Sociedad General de Aguas de Barcelona S.A. (Agbar),Itochu Corporation of Japan and the Brits UU. PNN, easy to imagine the party hasnt even started yet:)

What ever you do good luck. P.

[redartbmud] 25/11/2016 13:38

Svt now bending over backwards for the shareholders:

Severn Trent announces that the Revised Acquisition is revised to include a loan note alternative to the cash consideration available under its Revised Acquisition (the "Loan Note Alternative"). Severn Trent's intention in introducing the Loan Note Alternative is that UK tax resident shareholders who would otherwise trigger for UK tax purposes a capital gain if they accepted cash pursuant to the Revised Acquisition will instead be able to elect to receive loan notes ("Loan Notes"), in which case a capital gain would not be realised for tax purposes on the disposal of their Dee Valley Ordinary Shares.

The Loan Notes will bear interest (from the date of issue to the relevant holder of Loan Notes) payable six months in arrears at the rate of 0.25%. No application is intended to be made for the Loan Notes to be issued or dealt in on any stock exchange. A holder of the Loan Notes will have the right (subject to certain restrictions) to redeem them for cash at par on 1 July 2017 or on any subsequent interest payment dates. The Loan Notes may be redeemed by Severn Trent on or after 1 July 2017, if more than 50 per cent. of the nominal amount of the Loan Notes outstanding has been redeemed. Unless previously redeemed or repurchased, the Loan Notes will be repaid at par on 1 January 2020. The Loan Notes shall be non-transferable. The Loan Note Alternative shall be conditional upon the Revised Scheme.

Game, set and match.

Those with the begging bowl have got their wishes.

[zeppo] 25/11/2016 12:40

Out too soon in hindsight.

Was pleased with re-investments which have gained and better divis - until the very recent hike.

Good luck to all holders.


z

[praipus] 25/11/2016 10:36

"Employees would prefer the Ancala offer becasue the ST offer would involve substantial job losses to a mostly local workforce."

Really?

Not in my experience. Having worked for a company taken over by one of the sector leaders the focus was grow by developing the staff not axing them. For me it was probably one of the highlights of my career and personal development. Met a lot of new, intelligent and interesting people. As they were public company I became a shareholder too:)

Asset managers (hedge fund, asset strippers) do axe staff and outsource everything because they dont have operational knowledge of the business and dont want it either. But they do have one overiding ruthless goal profit. And Ancala as a private company probably treat its surviving staff as minions with no chance of shares in its fortunes through share ownership! IMHO.

[topvest] 24/11/2016 19:14

Yes, that is a very profitable sideline for Dee Valley, but if the agreement was terminated that would be a problem. Think it's unwise to assume that revenue stream will continue in perpetuity.

[hindsight_speculator] 24/11/2016 17:53

Re post 348, you have to add in a valuation of the non-core business i.e. billing commission received from WW and UU for billing sewerage. The RCV only includes the regulated business.
Billing commission in 15/16 was £2.06m. Less corporation tax and then times a multiple i.e. what you would pay for this income stream.
On reasonable assumptions on the non-core I get a premium of 45% to RCV.

Re post 314 I am nothing to do with Ancala. The first I heard of them is when the bid was announced.

Incidentally there are stakeholders that have an interest in the outcome other than shareholders. Employees would prefer the Ancala offer becasue the ST offer would involve substantial job losses to a mostly local workforce. In addition Welsh Government will be carefully monitoring the situation.