Cable & Wireless Share Discussion Threads

[rogermauricesmith] 15/5/2012 22:21

I've decided to take TDay's advice and get a life - well at least until the offer documents are published on Monday.

[cathian] 15/5/2012 16:46

7Kiwi - Thank you for the information about the previous write downs. However, it does seem to me a little odd that Vodafone wouldn't use CWW's tax losses if it acquired CWW. After all, the Circular dated 23rd April 2012 talks about CWW presenting "attractive network and other cost saving opportunities for Vodafone Group" I also imagine that the due diligence they carried out satisfied them that CWW was likely to be a profitable acquisition otherwise i don't suppose they would have made an Offer. Consequently, I think there is some quantifiable value in the tax losses but I haven't a clue what that might be. I have also assumed that someone of Gavin Darby's calibre would not have taken on CWW if he didn't think that there was room for a significant improvement in CWW's profitability albeit in the medium term. From the Vodafone perspective, and the Circular seems to confirm this, the acquisition of CWW appears to have a great deal of commercial logic and I don't feel that the Offer price of 38p adequately reflects it. It's an opportunistic bid and Vodafone are trying to strike too hard a bargain. That, in any case, is my current view but, as you rightly say, we shall have to wait and see what the latest Accounts say next week.

[7kiwi] 14/5/2012 21:07

The major part of the write-down was a write down of goodwill, because they didn't think the carrying value of Energis and Thus reflected the returns they once thought they were going to achieve.

And much of the rest, was a [edit: partial] write-down of the tax asset: again because they didn't think future profits were going to make [edit: full] use of them. That is very telling in itself.

I don't think there is any great conspiracy here. It is quite simple, the business had been under-performing for some time, and something had to give. The major clue was the CFO going in early 2011, and afterwards indicating he thought a profit warning was required, but the rest of the board (i.e. Pluthero & Marsh) didn't want to do it. The profit warning duly came about three months later, and Marsh went. Then later still, the write-down in the accounts, accompanied by exit stage left for Pluthero.

Wait and see what the accounts say next week.

[cathian] 14/5/2012 17:01

RogerMauriceSmith - I imagine Accounts have to show a true and fair view from both the Auditor's and Shareholders standpoints so can a Balance Sheet be said to do so if it were provable that the Assets shown are substantially over-depreciated or excessively written down. I simply don't know the answer to that or if, indeed, it has any relevance atall for CWW but I guess, as a general point, it could be very difficult for the Board of any listed company if they were aware that the Accounts materially understated it's true value and withheld such information from shareholders in an Offer document. And doesn't the FSA and/or The Stock Exchange have a roll in policing any sharedealing once an intention to make an offer has been announced? I always thought they did but I may well be wrong about that.

[tday] 14/5/2012 15:58

I think some of you need to get a life, away from this BB.

[rogermauricesmith] 14/5/2012 15:00

UBS selling and buying on Friday

Once again there was very little buying and selling of CW shares on Friday, less than 10% of previous levels.
And once again the share price went up.

[rogermauricesmith] 14/5/2012 14:58

Hi Cathian
The asset write-downs cannot be justified.
CW's asset base for the size of business it is is now embarassingly small.
I am certain Barclays or Rothschild will have done no due dilligence and relied totally on the directors.
Vodafone have been able to get away with offering such a low price because of the way UBS and Deutche have been manipualting the shares.

[cathian] 14/5/2012 11:33

RogerMauriceSmith - Many thanks and most interesting what you have to say about the asset write downs. The fourth bullet point in the Circular dated 23rd April says it all in effect. Basically, it's a wonderful deal for Vodafone! It's also interesting to read that "In providing advice to the CWW Directors, Barclays and Rothschild have taken into account the commercial assessments of the CWW Directors" But, given your comments about the need for asset revaluation and the Company,s past history, do you think that those assessments can be relied upon at face value or will Barclays and Rothschild also have done their own form of due diligence? Or will the figures that appear in any Offer document have the Auditors "seal of approval"? So far I,personally, feel decidedly uncomfortable about this deal and will take a lot of persuading that CWW is not being "surrendered" to Vodafone far too cheaply. Others may disagree but, at the end of the day, much will depend upon how Orbis react and, if they do not vote in favour and the offer does not proceed, the Board will obviously need to provide shareholders with a detailed explanation as to why they now appear to be changing course only some six months or so after appointing a new Chief Executive to carry through a comprehensive improvement strategy for the benefit of the long-suffering CWW shareholders.

[rogermauricesmith] 11/5/2012 17:28

Cathian

Writing down the value of assets is always seen as conservative accounting and rarely will an auditor turn down a request for it. But in this instance it was totally unnecessary.

CW's assets have been so written down it must be the best performing company in Britain on a return on capital (ROC) basis.

I believe CW's ROC, after the latest write-downs, is now three times better than that of Colt for example.

CW's board should get the assets re-valued and publish the results - especially the current value of its freehold properties. That would be very interesting to see.

[djwr100] 11/5/2012 15:40

Is it possible for all this activity to be holding down the share price, whilst, at the same time, allowing significant numbers of shares to be purchased, but without these buys taking up the price?

I mean, could this expensive set of trades actually prove of value to buyers of large quantities?

[rogermauricesmith] 11/5/2012 13:16

UBS activity plummets

Surprise surprise
UBS's activity yesterday (and all this week) was a fraction of its daily activity last week and the week before.
And even more surprisng the share price has gone up again.

[plastow] 11/5/2012 11:49

off the fools board risk reward ???

[rogermauricesmith] 11/5/2012 09:04

Final Results
If the final results are materially different to what has already been flagged CW would have had to issue a profits warning. Every asset possible was written off in the interims - only the cash position can be significantly different.
The CW balance sheet is already a fraud in its blatant undervaluation of CW's assets.

Offer Document
I wonder how binding those statements in the offer document are. It seems clear to me that at 38p there is going to be a lot of brinkmanship and probably capitulation. But Vodafone is taking a huge risk on its offer failing and the takeover panel ruling it cannot bid again for six months.

[careful] 11/5/2012 08:41

daily telegraph reports BT coomments about Vod/CW. deal.
BT intend to attack existing corporate customers.
They think that Vod would need to make significant investment to compete with BT on broadband if the deal goes through.

[plastow] 11/5/2012 08:32

its still a bargian for vod

[djwr100] 11/5/2012 06:30

But the assets and value remain.

[careful] 10/5/2012 20:34

the results may be massaged down, warts and all.
the offer may look more generous afterwards.

[andrewhbruce] 10/5/2012 20:22

Final Verdict

'no sweetner of any kind is possible'

AB

[7kiwi] 10/5/2012 18:36

cyan:

Read this:

p8:

"The Offer price is offered on the basis that CWW Shareholders will not receive any further dividends."

See also Appendix 1 starting on p20.

And p29:

"The Offer price is offered on the basis that CWW Shareholders will not receive any further dividends. If a dividend were to be declared, the Offer price would be adjusted downwards on an equivalent basis."


RMS:

The announcement on 23/4 was the clear statement of intent to proceed. This is just a consequence of that. I suspect VOD already know the FY results, and they should allow the wider investment community to form a better view of the performance of the business since the interims.

[uxb_steve] 10/5/2012 16:25

Hi Mike - Roger
Thanks. It does seem to indicate a go ahead is likely.

[cyan] 10/5/2012 15:38

Is there anything VOD could do to stop CW. issuing a special dividend. I would expect there would be a clause somewhere.

[rogermauricesmith] 10/5/2012 15:08

uxb-steve

Mike has posted the announcement. To me this is a clear statement of intent to proceed. Makes current share price crazy.

[mikepompeyfan] 10/5/2012 14:41

RNS Number : 0888D

Cable & Wireless Worldwide PLC

10 May 2012

CABLE & WIRELESS WORLDWIDE PLC - CHANGE TO 2011/12 PRELIMINARY RESULTS DATE

Cable & Wireless Worldwide plc will issue its preliminary results for the year ended 31 March 2012 at midday (BST) on Monday 21 May 2012, not 23 May as previously announced. The scheme document and notice of scheme meeting relating to Vodafone's proposed recommended acquisition of Cable&Wireless Worldwide will be issued at the same time.

A conference call for analysts and investors will be held at 14:00 (BST) chaired by Gavin Darby, Chief Executive Officer.

Conference call details will be provided on the day.

- ends -

[uxb_steve] 10/5/2012 14:31

Hello Roger
Where did you see the May 21st announcement - I thought they were announcing results on the 23rd?