Zegona Communications Share Discussion Threads

[elsa7878] 08/4/2021 12:07

Questions are 2 fold.

1) Will they push through the management bonus scheme at the AGM - netting them up to 10p per share.

2) Will they return all funds to shareholders or retain some to look for a similar deal.

[tiltonboy] 02/4/2021 14:09

rimau,

A large seller is holding the price back. Sale of 250k at 125p yesterday!

Need an arb to come in and take the seller out.

[rimau1] 02/4/2021 07:43

Mulling over why we have settled at the £1.30 mark. Clearly the acquisition will proceed and it will actually improve competition as a couple of big players currently dominate and this will create a large competitor to shake the market up. So the only rationale left is that the market is assuming Zeg invest the majority of the cash into a new investment and return a much smaller proportion. Even if this transpires, given the boards track record the discount is still harsh at 30% IMO. I will continue to add in the £1.20’s

[flyfisher] 30/3/2021 07:46

I am recent here and am a little short on background.

What happened to the woodford holding?

Thanks.

[tiltonboy] 29/3/2021 20:51

5m of trades marked after hours.

[kaur70] 29/3/2021 20:35

The share price should be floating at around £2 plus, confused

[kaur70] 29/3/2021 20:23

The share price should be floating at around £2 plus, confused

[stemis] 29/3/2021 19:15

They have 52% irrevocables so unlikely to be a counter bid

[pireric] 29/3/2021 18:30

Euskaltel closed trading at 11.12

Edit: Good point Stemis

Eric

[rimau1] 29/3/2021 18:10

This is one of the weirdest price actions in my investment life. I doubled my 94p holding paying 127p this morning and i may well double it again tomorrow. Lets remember pre todays announcement NAV was north of 140p so we are still below this with an agreed acquisition premium. If in the most extreme case the buyer pulls out the for sale sign has clearly been raised and Spain is consolidating. I have no idea why this is not north of £1.50p, not quite a risk free arbitrage but surely not far away from it. I think if i was aged 60+ with a 5 year investment horizon i may have taken profits but everyone else should be going very long IMO. The Zeg board must be pulling their hair out. Zeg can’t buyback either.

[tiltonboy] 29/3/2021 18:08

It's been a long time since I saw a "gift horse"

[skyship] 29/3/2021 17:42

Tilts - 130p Bid - Excellent call to have bought more on the news...well done indeed.

[kaur70] 29/3/2021 17:06

Free float of 8.84%
I thought that the share price would end at around £2
??

[dekle] 29/3/2021 12:58

Shouldn't the company be buying its' own shares now?

[tiltonboy] 29/3/2021 12:09

SKY,

There is a big difference what ZEG and MVI will do with the cash. As LIBC comment, it is likely that ZEG will return the majority of the cash, but whether MVI do the same is a totally different proposition....but this is ZEG we are talking about.

[pireric] 29/3/2021 12:02

Yes, imagine Marwyn will want to cash out (their own self interest even). Many other institutions are on board here, so they're calling the shots, to an extent. It's not crazy to think they could vote down the management remuneration package and ask for a wind up of the 170p/share proceeds for themselves.

The preferred return watermark is also a minimum 5% pa return over a 5 year calculation period

Either way, at these levels, the downside risk appears very limited

Eric

[energeticbacker] 29/3/2021 11:57

Scandalous management rem but they appear to have delivered here. Discount looks extreme even allowing for management incentive shares. ZEG is one of IC's Bonkers Bargains from 2020

[value hound] 29/3/2021 11:52

SteMIS: "Does this take account of the management incentive arrangements?"

- in a word, "no"; I was merely doing a quick calc pre 8am to decide what price I would take depending on the size of the rise. FWIW, that's c.150p. Their salary/admin costs are ludicrous.

I imagine their vanity and continued greed will make them do all they can to talk about investment strategies etc., going forward. OTOH, I imagine Marwyn will want the cash, so the balance of the decision would seem to lie with the other 10 listed institutional holders whose holdings total c.72%???

[flyfisher] 29/3/2021 11:37

The 2015 placings were at 120p and 150p, and based upon their stated calculation of a 5% pa compound return for shareholders the threshold for the incentive shares to have any value would have been 161p and 201p.
It looks as though the redemption of the first period triggered a new calculation for the second period, which set a lower baseline of 95.5p.

Shareholders voted for that?

As with many of this kind of vehicle, it needs winding up.

[stemis] 29/3/2021 11:29

Considering they have been holding one investment, staggered that they have been burning through E 5.6m of admin costs in a year including employing 6 people at a salary cost of E 3.6m including £1.1m for the CEO and £0.9m the COO. Not exactly slumming it. An incentive arrangement that gave them 12p a share would be around £25m

[stemis] 29/3/2021 11:20

In accordance with the rules of the incentive arrangements , Zegona management redeemed its Management Shares on 25 June 2020, in advance of expected closed periods. Despite Zegona's Underlying Asset Value being above the Preferred Return, Zegona's Market Capitalisation was below the Preferred Return and therefore no value was received by management in respect of the first Calculation Period. A new Calculation Period commenced on 25 June 2020 with the Baseline value set at the higher of Zegona's Market Capitalisation and its Net Shareholder Invested Capital on this date. The new Baseline value is £0.955 per Zegona share. The renewal of the Management Share rights will be subject to approval by Zegona's shareholders at its 2021 AGM.

Not sure what the definition of 'net shareholder invested capital' is but at most compared to current NAV, the value of the incentive arrangement is 12p a share.

[badtime] 29/3/2021 11:19

Only just logged on...pleasing news