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. |
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!! |
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... |
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? |
LP, that was already known at the time of the announcement. All they have done is take FX movements out of the equation. |
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 |
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! |
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 .... |
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 |
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. |
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. |
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. |
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. |
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 |
I am recent here and am a little short on background.
What happened to the woodford holding?
Thanks. |
5m of trades marked after hours. |
The share price should be floating at around £2 plus, confused |
The share price should be floating at around £2 plus, confused |
They have 52% irrevocables so unlikely to be a counter bid |
Euskaltel closed trading at 11.12
Edit: Good point Stemis
Eric |
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. |
It's been a long time since I saw a "gift horse" |
Tilts - 130p Bid - Excellent call to have bought more on the news...well done indeed. |
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