|Takeover price = £43.4m (270p)
Initial payment = £31.3m (195p)
Possible extra payment = £0.8m (5p)
Possible extra payment within three years = £3.2m (20p)
Missing money on 'expenses' = £8m (50p)
I guess we will never know where exactly who that missing £8m went to. Considering the cash in the bank was £14m, meaning the enterprise value was less than £30, I wonder how they managed to justify paying £8m in expenses to see the deal through.
£8m expenses on a £30m deal??? I wonder how much of those 'expenses' went to directors, lol!|
|Well, the deal has gone through and so we should get a payment of 195p (possibly 200p) in two weeks, then apparently, another 20p 'within three years' if all goes to plan.
How they decided on this 20p in three years thing I have no idea. Wonder if it is to do with tax? Is cgt only payable once that final payment has gone through, I wonder?|
|Can currently sell for 190p, possibly 195p, which is the expected initial distribution. There is then the possibility of another 20p (about an extra 10% or so), but it could take up to three years to get that. So, selling at around 195p and putting the money in a high interest account seems a good option on the surface.
This is far from a done deal. The company is very tightly held, yet just looking at the current Irrevocable undertakings of 33%, possibly 44% depending on 'certain circumstances' tells us that many investors are not happy with this deal. Over 90% of the holders will have been contacted, but less than half have accepted it and that includes directors that have a golden deal at IGT to follow.
So, I will wait for the EGM and attend to see what develops. My guess is that it will be rejected and IGT will have to make a higher offer (with simpler terms?) to get the percentage vote they need.|
|So, cyberview mention a price of £43.4m in the offer (270p), but only expecting to distribute £34.7m (216p). What happens to the £8.7m difference? On top of that, only £31.3m will be distributed in first instance (195p), with the rest (21p) expected sometime in the next three years and not even guaranteed.
What sort of retarded takeover deal is that? Whatever happened to just buying the company for a fixed fee that gets distributed? Very odd - are we just seeing smoke and mirrors, the deal is just so low.
Looking at the value of Cyberview, we could value the company based on the non-US business (the core business) that makes the profit and then on top of that, add the US business that has had so much investment and would have been awarded licences in March had it not been for the takeover
What we see is with cash in the bank of £10.9m, the £34.7m tag values the enterprise at £21.7m. Profit from the core business was £3.4m, putting them on a PE of around 6.4x past profit. However, with the new generation machines now installed and earning much higher revenue, the new competitive terms for Cyberview and contract wins with the IBA, Betfred and Czech Republic, it is likely we will see that jump, possibly double because the extra revenue goes straight trough to the bottom line.
My view is that the company is selling at a past PE of around 6x and current year PE of somewhere around 3-4x. We are over 5 months into the current year already so should be looking forward to next years figures to value the company. Perhaps they are selling at 2-3x earnings for next year?
On top of that IGT get the US business and intellectual property thrown in for free
The offer should be much much higher imo. Probably should be around 400p minimum and even that would be a steal. The deal is over-complex and under-values Cyberview's assets and profitable core business.|
|Well, the takeover price is low, but the directors have their dream jobs with IGT. I wonder what sort of pay-off they get?
"Upon Completion, Seamus McGill and Mark Nanovich will both resign as directors of the
Company. Mr McGill will become an employee of IGT
and Mr Nanovich will act as a consultant to Cyberview Technology Limited, which will then be a
subsidiary of IGT, for a certain period in
order to assist with integration and succession matters. Jean-Marie Gatto and Sylvie Linard
will resign as employees of Cyberview Technology
Limited, but will continue to act as directors of the Company, as will Sir Michael Wilkes and
Larry Woolf, until such time as the First
Distribution is made."|
|Talking of which, ta ,it needs a shake or likety to revert to a comotose state prior to being gobbled. Look at both AMS & ITM.|
|Things have changed a lot over at CLTV, basbas. From previously focussing on the Peer to Peer Video site and associated terrestrial channels a few months ago, they now seem to be moving over to porn!
So, I'm not entirely convinced about the CLTV board of directors or where they intend to take the company. Hopefully there are not too many parallels with another media company we know all too well...|
|Cheers ta. I'll take look at cltv.
AMS, boring, solid, and growing fast ...
looked at cltv; not space i understand; however if you go thus far out, have a good look at ITM Power.|
|More good news - Cyberview's Lara machines are now undergoing trials in Betfred bookmakers
The trial started in May and c could be another very good contract win for the company. Would be instantly profitable I would imagine.
Cyberview do seem to be rapidly extending their lead in the supply of FOBTs to UK bookmakers
I wonder how the talks with William Hill are going?|
|Directors at the Ladbrokes AGM remained very happy with the current performance of the machines in Ladbrokes. From their perspective, they are hoping that if IGT take over Cyberview then they may be able to negotiates better terms. The impression I got was that the new terms that Cyberview have with Ladbrokes are far better than the previous ones.
News from Inspired Group indicates that their machines in William Hill also continue to do fine, so that is also good news for the market in general
The poor performance of the Inspired pub machines seems to be restricted to that market. From what I have seen in pubs, people often play the machines when taking a cigarette the smoking ban obviously impacts the business quite a bit.|
|Ladbrokes interim statement in advance of today's AGM shows the continued strength of the gaming machines.
Considering that the roll out of new machines was only recently completed in Ladbrokes plus the new longer opening hours was only introduced in September, as were Cyberview's improved terms on the Ladbrokes contract, I expect the UK division to be making £6m+ this year. The effect of all of these factors combined takes the extra revenue straight through to the bottom line.
"Machine gross win increased by 26% benefiting from the completion of the roll-out of new dual screen machines at the end of March 2007, new gaming content and extended evening opening hours. Average weekly gross win per Gaming Machine was £673 compared to £538 for the same period in 2007."
The potential offer by IGT, at 220p per share gives and enterprise value to Cyberview of £24m once you strip out the cash. That puts them on a PE of 4x and values the IP and the US gaming licences they are due at basically nothing. Edison were predicting £9m pre-tax profit last time I looked and although that may have been cut slightly, it makes that £6m estimate look very conservative.
Results were due out in March, as was the Nevada gaming licence meeting. Cyberview will have some explaining to do before the end of June, when results must be announced.|
|But analyst the pub sector is collasping so the UK profits cannot be relied on.
Still a little too much risk compared to other companies in the sector.|
|To put the valuation into perspective, with the UK business making £3.3m last year. and Cyberview have re-negotiated their contracts with Ladbrokes to improve the margins quite considerably, they will make much more this year. The new machines have been a big hit and they are winning new contracts to place machines in the IBA shops too. They could easily make £6m this year and £8m the year after, just on the UK business. That alone should value the company at £100m, even without the rest of the world and in particular, the US business.
Once they start getting machines into US casinos, we could expect a big take-up as the directors own casinos. So, we could be looking at £15m+ profit pa for Cyberview in three years time and have them valued at £150m+
The offer should be at least £5 per share and even that would still undervalue the company|
|The delay of any type of follow-up announcement is getting ridiculous.
The worst thing is that Cyberview would now have had the Nevada gaming licence in the bag for over a month by now had the offer not been made by IGT. They could now be placing machines inside Vegas casinos.
I suspect it is taking a long time for the directors to negotiate their contracts with IGT after the sale. The sale price undervalues the company by a long long way, so I can only conclude that the whole deal is being set up for the directors to benefit via IGT packages, not shareholders through share price value.|
|Also, some full page Cyberview ads appearing in the trade mags this month.|
|Article in one of the trade magazines this month saying that Cyberview have won a two year deal as the preferred supplier to the Independent Bookmakers Association (IBA)
"Cyberview has consistently demonstrated itself to be the the very best in the UK and the decision to award the contract was easy"|
|"Server Based Gaming for Casinos USA
June 25th 26th 2008 J.W Marriott, Las Vegas
'Understand, Implement & Maintain
Server Based Gaming Systems for your Casino Floor'
What opportunities does the event offer your business?
A market leading event...
The 'Server Based Gaming for Casinos Summit' focuses
on the issues that are current, hot and relevant to your
business. Key industry speakers will include innovative
technology leaders such as WMS, Bally Technologies,
Cyberview, Gaming Labs, Aristocrat Technologies and
many more! "
Nice quote from that pdf that mentions cyberview
"Led by companies like IGT and Cyberview, server based gaming looks set to appear on the Vegas casino floor in 2008, with 2009 expected to be the" year that many of the top casinos take it on
|Cheers basbas, only just seen your post. Hope all is well.|
|Well done ta for spotting this beauty months ago|
Oops.I normally do my weekly blog on Tuesday, but I was so busy pondering the wonders of the universe that encompasses the gaming industry that Tuesday became Wednesday, so I'm doing it now, a day late. If it makes you feel better, I'm also a dollar short.
Big slot news this week, if you consider the move toward server-based gaming-currently steaming along at a pace normally reserved for the evolution of new species-to be an important deveopment. No one knows exactly how slot manufacturers and casinos are going to make incremental revenue from server-based gaming, or "networked" gaming as it's more often called now. But everyone knows that somehow, this is going to be great for casinos and great for players. I can see a few ways it will, in fact, be great for both parties, although I'm not quite as enthusiastic as some in the industry.
In any event, the traditional, box-making slot manufacturers have been getting ready for a day when boxes will already be on the floor and all they have to do is provide a steady stream of content. To achieve that, even on a limited basis, there will have to be an open-architecture system available on the host computer of a given casino, one that takes no sides on whose game content it accepts and hands off to the players. It needs to be compatible, and up to Gaming Standards Association protocols.
Last year, two rival slot-makers, Aristocrat and Bally, announced their system divisions were working together to achieve this very goal, a working open-architecture server-based network that would be compatible with anyone's games. It was lauded by all the GSA protocol-type executives. But not to be outdone, guess who got into the act a couple of weeks ago? That's right, the long-reigning king of the slot business, International Game Technology. But IGT is not alone-just as Bally did with Aristocrat, IGT is partnering with one of its strongest rivals, WMS Gaming, in creating an open-architecture system.But there's more. Just this morning, it was announced that IGT is in merger talks with one Cyberview Technology, the company that made its name running fixed-odds betting terminals in Great Britain before becoming the very first U.S. company with a server-based system certified by Gaming Laboratories International. It all makes sense, since WMS Gaming licensed technology from Cyberview a couple of years ago on its way to creating new slot experiences in the past year that are based largely on server-based technology.
So now we have the two alliances: Bally-Aristocrat and IGT-WMS (and maybe Cyberview). Both will presumably develop open-architecture systems on the way to providing a basis for server-based, networked slot floors in the future. One of them will be the Microsoft of the slot floor. Maybe one will be the Microsoft and the other will be the Apple of the slot floor. We'll have to wait and see this, as well as the ways in which slot-makers and casinos decide server-based gaming will make money, and how much of a given slot floor will be networked.So much to find out... If anything, we've got a couple of interesting years ahead in the slot business.