Cable & Wireless Share Discussion Threads

[dickbush] 29/5/2012 13:11

I have just voted my shares AGAINST the offer.

[mikestamp] 29/5/2012 11:35

Can we clear a couple of points up please.

1.All shareholders vote on June 18th, as we stand this is likely to fail at the offer of 38p ?

2. So the share price will drop considerably if it fails, however it is holding up on expectation of a better offer before June 18th ??

3. Has there been any indication that VOD will increase their offer, and can they ?

[7kiwi] 29/5/2012 10:46

RMS,

Your operating profit numbers are 12 months out of date.

The pre-exceptional operating profit for FY11/12 was £100m (not £153m as you stated; this is the post exceptional figure for FY10/11). The post exceptional operting profit for FY11/12 was actually a loss of £378m.

Using the pre-exceptional figure the £100m represents only 1.76% of VOD's profits.

But you should also look at the overall bottom line profit. On a pre-exceptional basis in FY11/12 this was £65m compared to £212m in the prior year. People don't pay high ratings for declining profits.

[jacks13] 29/5/2012 09:56

If the vote fails Vodaphone don't keep all of those acceptances among the votes cast, they have to start anew, perhaps with the exception of the irrevocable undertakings. This would change the dynamics of the process and 38p may not then be enough to acquire even a 50% acceptance.

[boadicea] 29/5/2012 09:22

RMS - I beg to differ.
I think you are overlooking the following -
"Vodafone reserves the right to elect, with the consent of the Panel, to implement the Offer by way of a takeover offer as it may determine in its absolute discretion. In such event, the acquisition will be implemented on substantially the same terms subject to appropriate amendments, including (without limitation) an acceptance condition set at 90 per cent. (or such less percentage, being more than 50 per cent., as Vodafone may decide) of the shares to which such offer relates, so far as applicable, as those which would apply to the Scheme (the "General Offer Acceptance Condition").

So Vodafone could go ahead with anything over 50%, which they may well get, and not walk away. Then proceed to mop up at their leisure.
What they could not do is get a clean take-out with court sanction or cancel the quote with less than 75% majority.

[rogermauricesmith] 29/5/2012 08:12

Scheme Document Valuations

Did a few calculations from the figures quoted in the Vodafone scheme of arrangement documents about the relative values of Vodafone and CW.

Vodafone is valued at £86.88 billion and has annual sales of £45.96 billion and operating profits of £5.66 billion.

CW is valued at £1 billion and has annual sales of £2.26 billion and an operating profit of £153 billion.

So CW will contribute 2.5% of Vodafone's annual sales, 2.7% of its profits, yet it is only rated at 1.2% of its value.

It's a crude way of valuing a business but still telling.

This is such a good deal any way it is looked at. To me it means that Vodafone will sweeten the terms to get this deal though rather than let it fail. Orbis just has to hold its nerve - 42p a share will do it.

[rogermauricesmith] 28/5/2012 22:36

djwr - there really isn't much chance of this getting 75%. Vodafone can't let it get that far as it will have to walk away if it loses the vote (I believe that's one takeover panel rule that can't be broken). It has to find a way of sweetening this by 10% within the panel rules - there has to be a way.
If it walks CW will be bought by someone else.

[djwr100] 28/5/2012 22:03

I don't know why most private holders are disenfranchised..surely they just tell their broker their instructions.

I voted today on-line. NO.

The paper form was too hard to understand, so it's lucky the on-line site was easy.

It's no big deal to have a crest membership. I use Charles Stanley... Fastrade.

[boadicea] 28/5/2012 17:53

There's little doubt the bid deserves to be thrown out - with the "Friends of VOD" BOD of CWW to follow and a new lot who will fight for CWW installed to replace them.
Problem is I just don't see how it can happen.
Most private holders are effectively disenfranchised by the nominee system while for the institutions (yours and my pension funds etc) it's just other people's money.

This is just one of the latest examples of how the city gravy-train system of "vote yourself a fortune of other peoples assets" needs turning on its head.

While I am not sure that Orbis have such high ideals in mind, I think we should wish them good luck anyway.

[rogermauricesmith] 26/5/2012 19:25

There's no question that the Vodafone bid is highway robbery. But without another bidder the robbery will eventually succeed although the villain may be forced to drop some of his swag on the way to the exit.
I still think Vodafone will have to sweeten this by 10% to get it through. How they do it I don't know. Vittorio Colao still wants to try and get home with all the goodies intact.

[dickbush] 26/5/2012 14:35

I'm on the same page as that writer. Before anyone asks, I don't even visit the fools board.

[plastow] 26/5/2012 00:06

this was a post on the fools board which i agree with,, for long term holders




The buy price is irrelevent, it is what they ore worth to you now that is.

I hold 0.01% of the total shares and I will be voting against for many reasons, some emotive although some are fiscal also.

1) The offer at 38p undervalues the company by about half (depending on which method you use.), especially the tax allowances, which Vodaphone say they are unable to use. This is not true, and these alone are worth what they are paying for CW. The fibre network would cost IRO £5bn to install from scratch, and yet they are offering just over £1Bn. The existing contracts again are worth more than they are willing to pay. The NAV has been written down remorselessly over the past few reporting periods, whilst I am not in a position to argue with this it does seem that this has been done suddenly, not gradually - why wasn't it done by the previous administration under Plutheroe?

2) The present BOD have sold out, they don't want the slog of dragging the co. back to profitability, they should at least make an effort and this alone is enough to make me reject the offer. Where was their defense, if there was one, why wasn't it made in public, they have a Duty to do their best for the shareholders (who in theory are their employers), but no, they rolled over and gave in. The "new" CEO is ex VOD and was probably just a placeman to smooth the path. If the deal doesn't succeed, (and I hope it doesn't) then I will be voting against the whole board at the AGM (whenever that is held - I cannot find it in the report)

3) The way the forms were written - they presumed that one was accepting the offer - the "reject" should have been first, not the other way about.

There are so many things that "smell" about this action that call into doubt the honesty of those involved, one can't blame VOD. for being opportunist - but one can blame the board of CW.

Rant over.

[warranty] 25/5/2012 23:43

Unbelievable isn't it whilst the investors who paid out good money and actually own the company get stuffed!! What's the saying, at least highwaymen wear masks??

[plastow] 25/5/2012 23:13

not even turn up ,,, just sign on the dotted line when required,,

[jacks13] 25/5/2012 17:54

What was Gavin's performance target, that he turned up for work in a tie?

[rogermauricesmith] 25/5/2012 17:13

The scheme document

I have been reading the scheme document. The wording seems to have softened with reagrd to offering a higher price.
It now says:
The Offer price of 38 pence per Scheme Share is final and will not be increased. Vodafone reserves its right to increase the Offer if a third party announces a possible offer or offer for CWW.
The words "possible offer" have been added. What is a possible offer?

Also the offer recomendation by the board was "unanimous"
The scheme document states:
"CWW Directors believe that the price of 38 pence per CWW Share
represents an excellent opportunity for CWW Shareholders to realise an attractive valuation in cash today."


It also reveals that Vodafone has agreed to pay £50 million in cash into the CW pension scheme.

Also Gavin Darby has picked up four milion shares (see wording below):
CEO Recruitment Award
On 21 December 2011, CWW granted to Gavin Darby a CEO recruitment award (the "CEO Award") over 4 million CWW Shares under the terms of a Deed of Grant. The CEO Award comprised two elements:
(i) the "Incentive Award" over 2 million CWW Shares. The Incentive Award was subject to corporate and personal performance conditions which were required to be met before 31 March 2012 and which the Remuneration Committee has determined have been met in full; and
(ii) the "Matching Award" over a further 2 million CWW Shares. The Matching Award was subject to the condition that Gavin Darby acquired a matching number of CWW Shares before 31 March 2012. Gavin Darby acquired, and now holds, 2 million CWW Shares, therefore this condition has also been satisfied
in full.

Oh and CW is also spending £15 - £18 million on fees for selling itself to Vodafone.

[dickbush] 24/5/2012 13:39

My favourite course of action, too.

RMS, it wasn't me who mentioned Slim. But who else but VOD could use all CW.'s tax losses? After taking into account the net debt it looks like they alone pay for this bid. The whole operating company and the £200 mil of BT savings are in for nought. Remind me to buy some VOD. A decent yield and some very smart management. Must be worth investing in.

[djwr100] 24/5/2012 13:09

Yes, how about some managers that can manage?

[rogermauricesmith] 24/5/2012 12:01

I agree with all that. Scheme now looks certain to fail and Vodafone must have known this before it started.
It must have a plan B mustn't it?
Look 42p a share definitely buys this compnay and that is only £1.1 billion, a rounding error as far as Vodafone's finances are concerned.
Anyone who was listening to the press conference of former sister company CWC today will know that data capacity is going to be all in the next few years.
The one option Vodafone doesn't have now is not to buy CW.
So it must find a way to bring Orbis on board. I don't think playing high stakes hardball is now an option for it.
The only way I can see is a special dividend of £100 million by CW before the deal closes. Anyone got any other ideas?

[plastow] 24/5/2012 09:20

boad i agree it may be a bumpy ride but vod will get cw and ill top up if theres any real weakness in the share price
your have a job make to 10% on this market at the moment and i expect anyone who sold out three weeks ago and reinvested in the market are most prob sitting on a slight loss,, GL

[boadicea] 24/5/2012 08:40

If just over 6% of the shareholders vote against (in addition to Orbis' 19%), the SOA fails. Interestingly, one gets the same result if just 24% of votes abstain (= are not cast), or with any proportionate combination of against and abstain, e.g. 2% against, 16% abstain. (An abstention is worth 1/4 of a vote against due to the effective enhancement of the value of the Orbis holding as a % of the votes actually cast.)

On this basis, failure of the SOA seems more than likely to me in which case VOD will have to go for a conventional takeover bid and with Orbis against, the CWW quote would almost certainly be retained even if in a minority position as VOD would also need 75% to delist it.

Odds are that VOD will get effective control somehow, but possibly (probably) not a clean sweep.

[jacks13] 23/5/2012 21:36

My apologies careful, no real offense intended. Feel free to have a pop at me sometime.