Zegona Communications Share Discussion Threads

[dan_the_epic] 09/4/2021 11:44

Do not believe tax is an issue elsa. Look up substantial shareholdings exemption legislation that provides exemption in the uk from capital gains tax as written in their annual report. These boys have done a good job on their investments and have a good track record in industry which is why Zegona was set up in the first place. stock should be 150p min IMV

[livewireplus] 09/4/2021 07:59

Indeed - but new opportunities may be limited in present market ??? They had premium knowledge of the industry / company they bought in to before - and added no other investments during that time. I'll be happy to sell out on takeover - not wait to see what 'opportunity' they chase next (if indeed they do go down that route).

[skyship] 09/4/2021 07:57

Whole deal of E428 hedged at 115.67, ie £370m. A pretty good deal IMO.

[elsa7878] 09/4/2021 07:49

I'm not suggesting that they don't deserve it - where is the agenda? All I'm saying is that if you know The Marwyn way, they will likely look for another investment. That means leaving a decent slug on the table (£20 million?). Tax to pay?

[livewireplus] 09/4/2021 07:48

Indeed - the Management are on a nice little earner. But they spotted the opportunity years ago so deserve it (up to now). Let's see if / what they do to keep it going once the takeover has gone thru.

[dan_the_epic] 09/4/2021 07:41

I literally wrote it yesterday elsa, are you serious. Its a 5 YEAR 5% per year hurdle scheme. If the share price gets to 170p I calculate 7.2p. I wish people would drop their agenda against management. They have delivered a very strong return in the two investments they have done and that accounts for running fees. I have earned over 6% per year since IPO taking the the Telecable tender and dividends and assuming 160 pence. That shoots the telco index out of the water. A discount of 15% is not at all a function of time to completion?? Euskaltel is at a 1% discount to the offer price, that is time to completion!!

[elsa7878] 09/4/2021 07:37

169p plus bit of cash on the balance sheet. Sent 2 emails to the management to ask for confirmation of the expected scheme payment to management and they have not replied.... I'm expecting around 10p... Leaves 160p. Discount is therefore around 15%..which is a function of time to completion and the fact that they will probably retain some cash, if not just so the management can keep paying themselves a £1 million a year each while they "look" for another investment. Anyone know about the tax implications - presumably they will have to pay some...

[rimau1] 09/4/2021 07:35

Logic suggests a heavily weighted capital return to me. You wouldn’t normally go to the expense of a hedging contract if the intention was to retain substantial funds. The track record of the mgt team means they will raise future funds easily so why not return all the proceeds to close the valuation gap and then simply conduct a placing when the new target is identified?

[tiltonboy] 09/4/2021 07:34

LP, that was already known at the time of the announcement. All they have done is take FX movements out of the equation.

[pireric] 09/4/2021 07:33

Or more simplistically, the £ has been strong since December and there's a good chance that it at least remains where it is today particularly versus the euro given relative COVID situations etc. So this takes out that tail risk of FX eroding away at the expected proceeds while the transaction completes and looks like they've timed it OK on a little currency pullback. Eric

[tiltonboy] 09/4/2021 07:23

ZEG hedging the FX, therefore protecting it's GBP proceeds. Pretty much rules out a further non-GBP acquisition...but does it indicate proceeds being returned to shareholders!

[livewireplus] 09/4/2021 07:21

Re this mornings RNS - then GBP370m seems to be about 25% uplift on the present mkt cap (as indicated on advfn info). Look forward to a rise of some sort today ....

[dan_the_epic] 08/4/2021 12:18

1) it is a 5 year scheme with a 5% a year return threshold from the new base so the management payout is up to 7.2p per share if this gets to 170p; 2) To Igbert. That may explain it to you but it does not to me. Did you read my post 219? Telcos have been the dogs dinner over the last 5 years and these boys have netted me a 6% return per year if this goes to 160p which is more close to raw liquidation value. That I am delighted with and deserves at least NAV -msp when the NAV is cash !, not a discount. This is buying money for pennies under the pound

[red ninja] 08/4/2021 12:17

Posted earlier in this thread there was "Liberum View: "We would expect the majority of capital received by Zegona to be returned to shareholders." I am not so convinced, I would have thought they will return some cash, but I would expect them to use some/a lot of the money to invest in a new company which they think is undervalued and/or could be enhanced. I mean if you read the annual report they employ office staff to analyse companies just for that.

[igbertsponk] 08/4/2021 12:12

1) Of course! Like all Marwyn vehicles the management do better than the shareholder! 2) No - they'll keep the cash and try to do something similar again Those answers explain for me why there is a discount.

[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