Talktalk Telecom Share Discussion Threads

[1gw] 10/10/2020 12:25

That's what I understand by "together with a full unlisted share alternative", but we have to wait to see the detail of any formal offer that is actually tabled.

[feelthepain] 10/10/2020 12:21

So does that mean as a PI I can accept shares in new Co.Thanks all for input.

[1gw] 10/10/2020 12:20

I might do the same with my remaining shares (I sold around 1/2), I'm not sure. But we would have far less insight into what is going on once they are private and it would be far more difficult to sell our shares at a reasonable price until they go public again (if they ever do).

The Lombard piece in the FT ("Investors should not let Fomo stop offer to take TalkTalk private") concluded the 97p was a reasonable multiple, at 7 times next year EBITDA and 15 times operating FCF. It did suggest we might expect to see the 97p "inched up" a little, and the independent directors will want to show they're not purely ornamental so I would expect them to try to achieve a small increase in exchange for a recommendation.

[1224saj] 10/10/2020 12:10

1gw, nice structured and helpful piece .As I've posted earlier, I'm in the Telco industry and will not take the cash because I see where TT is going whatever coat she has on :-)

[1gw] 10/10/2020 11:36

Dunstone is not being asked to accept a cash offer here. In fact, Toscafund say they will only make a firm offer if he agrees to take paper. This would be a cash offer to buy out the minority holders who don't want paper.

So Toscafund, Dunstone and anyone else who wants elect to swap their shares in Talktalk for shares in NewCo. Anyone who doesn't want to do that gets 97p (or whatever that is revised to in a formal offer) cash for their shares.

So I would think probably Toscafund, Dunstone and Ross swap 70% of Talktalk for 70% of Newco, and are indifferent (except possibly for any tax consequences). If NewCo is subsequently floated for much more than the cash offer then they will benefit down the line. Toscafund has to raise the finance to buy out the approx 30% (or 40% if Ross wants the cash) not owned by Toscafund, Dunstone (and maybe Ross).

If it is done by a scheme of arrangement then I think they will need 75% of the votes of the non-offering shareholders. So 75% of around 70% (100% less Toscafund's position) is around 53%. Dunstone and Ross have around 40% between them, so they would need say 13% of the remaining about 30%, or just under 1/2 of the remaining shares to be voted.

[1224saj] 10/10/2020 11:29

Shaker44 Yes that's exactly as I see it. So many times in the Telco industry you see people acquire assets, only to jettison them some time later to the original owners for a premium but below market price. Dunstone and the BOD will be looked after as will the institutions. The only losers will be the PI's which include the employee share scheme. It's hard to value their investment, but I would say it has to be around 100m at 97p. That's potentialy around 50p per share light or 45m shirt. Can you please send me the link to the FT artucke

[shaker44] 10/10/2020 10:55

Maybe Dunstone's long term game is to get it private before refloating a few years Down the line in better market conditions. . If he votes for 97p takeout he can buyback from Tosca at 120. Which he couldn't do at 135 of course.
Unless there is a cosy stitch up planned why did directors buy heavily a couple of months back?
And the FT makes an interesting case for why a trade buyer is unlikely.
But I hope I am wrong!

[1224saj] 10/10/2020 08:51

Feel the pain, Dunstone owns 29.9% Tosca 29.1% David Ross ( dunstones long time business partner) owns 11%Institutions own 20% BOD and PI's own 10%. Tosca can vote, needs only to get to 75% to win the deal.The unanswered question is, why did Dunstone and the BOD reject Toscas offer of 1.35 in July, especially when it is now accepted in the telco industry that TT are in a better trading space??

[feelthepain] 09/10/2020 22:15

I am currently down 32% on this share. I see no reason for it to be as low as 97p and feel that we are being stitched up with no ability to do anything about it.

Question.

If Tosca have 30% of shares, in round numbers and so does Dunstone that leaves 40% of shares in the hands of others, so Dunstone does not have the majority of shares and will need support for the other investors.

On the basis that Tosca would not be allowed to vote in favour of their own offer? That means that Dunstone alone cannot vote this through, it needs at least 5% of the others to agree on the price.

I know this is a tall order to expect sufficient numbers to vote against it as many will have bought cheaply and 97p will be a profit, but is my reasoning correct in terms of Tosca not being able to vote on the buyout?

I don't know how much the other directors have and if they have a lot that may well ensure the vote go through.

[1224saj] 09/10/2020 20:37

I'm not selling until they knock on my door

[paulo435] 09/10/2020 17:37

Same here shaker

[shaker44] 09/10/2020 17:11

Nope! Gonna watch and wait....

[dudishes] 09/10/2020 17:00

1224sa/Paulo435,

Only sparked as Son has Talk/Aol at his addy, and wondered how matters would change?

I would not have a clue.

shaker44, having looked at share price over a few months, take the money and run!

[dudishes] 09/10/2020 16:46

1224sa, you are correct, my mistake checking dates.

[shaker44] 09/10/2020 16:42

Trying to do up pi's like kippers.

[paulo435] 09/10/2020 16:36

Furthermore :
“ In a statement issued in response to an enquiry from Sky News, a Toscafund spokesman confirmed that last year it had "made an indicative offer of 135p to take TalkTalk private, but it fully understands the reasons behind the board rejecting the offer".

.....but now we are going to come back just a little over two months later and offer you even less than that!!. You couldn’t make it up lol. Article is here : hxxps://news.sky.com/story/talktalk-rejected-135p-a-share-bid-from-major-investor-toscafund-12037466

[paulo435] 09/10/2020 16:29

Tosca made this statement to Sky News in only July of this year:

"Toscafund is aware that UK broadband fibre and mobile participants are undergoing a phase of consolidation with all the benefits that will bring, and believes that the 135p-per-share valuation of 2019 represents a deep line in the sand, given that TalkTalk is in a better condition in 2020 than it was in 2019."

Nothing has worsened greatly since that time. So, why would you make a statement like that and then offer 97p!?? I have my own theories on that one!

[1224saj] 09/10/2020 16:15

As I stated earlier, all the BOD are underwater with their averages. Dunstone must be puppeteering them with corporate sweeteners, just like he'll be receiving from Tosca. Once again screw the PI's

[1224saj] 09/10/2020 16:11

Dudish, I can't see the purchase in October, I think you might be seeing the purchase in August?

[dudishes] 09/10/2020 16:07

Maybe Tosca missed the opportunity Jul/Aug, could have bid at 75p. Some big chunk cut there, and Tosca are no spring chickens.

Suspect a setup.

[1224saj] 09/10/2020 15:13

Dudish, add that to the 22m shares they bought at 75p back in August, very happy bunnies. It would be interesting to see their historic averages

[septimus quaid] 09/10/2020 14:45

This isn’t capitalism it’s just manipulative chancers gaming the system.

May they burn in hell

[dudishes] 09/10/2020 14:24

Anyone notice that Equinity Trust (Jersey) bought a very large lump for ESOT 2 days prior to announcement? If deal sealed, very tasty little earner for ESOT!

Guess employees are yipping it over the weekend!

Clever or inside?

[quepassa] 09/10/2020 11:38

Declarable short positions total 1.64% as at 9/10/20

Eleva Capital 0.61%
JPMorgan AM 1.03%



ALL IMO. DYOR.
QP