LBTYA - Liberty Global

[scorpioncapital]

Think of the deal as a deleveraging. If they don't buy back the debt, then the funds are not deleveraging the remaining debt. As rates rise, and you have less business, clearly what the CEO was saying at the call makes sense. Wait and see. If debt cost goes too high they'll deleverage, if it doesn't, well wreckless as it may be to continue to leverage up it may benefit the shareholders converting equity to debt. A slow leveraged buyout. Alot will depend on rates and business results.

[walkie518]

80% is certainly a fungible number and my thought was the probability of closing was higher

from another view, the 20% difference might feel like 50% and it could be that investors misjudge to the downside

that said, if the sale is blocked, the stock might go up b/c liberty keeps some really nice assets...if the sale goes through, nearly $12B goes to buyback as we watch Switzerland (hopefully) turn the corner

net-net, at these levels, I don't see why owning more isn't a good idea?

[ander]

80% is certainly a fungible number and my thought was the probability of closing was higher

from another view, the 20% difference might feel like 50% and it could be that investors misjudge to the downside

that said, if the sale is blocked, the stock might go up b/c liberty keeps some really nice assets...if the sale goes through, nearly $12B goes to buyback as we watch Switzerland (hopefully) turn the corner

net-net, at these levels, I don't see why owning more isn't a good idea?

I agree and at these levels I continue to top-up my position. It's just that my approach is conservative and assume the worse case (i.e., deal not closing) - in that case I still see upside at these price levels.

[bigbluffzinc]

Does anyone know (done any correlation work with other UK businesses) how much of this is Brexit?  I know it's been mentioned before but don't think there was much of a response.  Sterling has held up pretty well while LBTYK has taken it on the chin & I don't see this business as particularly vulnerable (particularly with the optionality if the deal closes) to a deteriorating domestic situation in the UK but I can't really see material business deterioration ex-Brexit either.  I initiated at $26-$27 and have been adding but I don't want to miss something obvious either...   

Obviously funds betting on a bigger VOD deal/buyout/speculating if Brian missed Sky he may do something with LBTYK are going to have to unwind & that can bring the opportunity.  But given the magnitude of the decline I'm concerned I've missed something...  After re-reading the 10Q's/transcripts I don't see what & would love (hate...) to have someone point out the magnitude of Brexit/etc & why this is a disaster.  I know Howard Marks said levels in the UK are still too high to make anything (debt) investable but I don't have any numbers.    

I am actually on the other side of just about everyone on this forum and think Fries is an "ok" and relatively transparent CEO.  I think Belgium and Switzerland really are tough markets but I think he's done a decent job of exiting/partnering to build scale when he's disadvantaged and working out solutions & Virgin Media is a slam dunk. 

I agree that he's sold the companies best asset but I do think he got a reasonable price for it and I don't think the rest of the company was/is being valued appropriately and it's reasonable to assume selling at a fair price to arbitrage the value gap between public/private is an "ok" strategy.  I'm probably too cynical but I'm skeptical about whether people would think so poorly of him if the stock price was $37-$40 USD with no fundamental change to the business... 

[vince]

Does anyone know (done any correlation work with other UK businesses) how much of this is Brexit?  I know it's been mentioned before but don't think there was much of a response.  Sterling has held up pretty well while LBTYK has taken it on the chin & I don't see this business as particularly vulnerable (particularly with the optionality if the deal closes) to a deteriorating domestic situation in the UK but I can't really see material business deterioration ex-Brexit either.  I initiated at $26-$27 and have been adding but I don't want to miss something obvious either...   

Obviously funds betting on a bigger VOD deal/buyout/speculating if Brian missed Sky he may do something with LBTYK are going to have to unwind & that can bring the opportunity.  But given the magnitude of the decline I'm concerned I've missed something...  After re-reading the 10Q's/transcripts I don't see what & would love (hate...) to have someone point out the magnitude of Brexit/etc & why this is a disaster.  I know Howard Marks said levels in the UK are still too high to make anything (debt) investable but I don't have any numbers.    

I am actually on the other side of just about everyone on this forum and think Fries is an "ok" and relatively transparent CEO.  I think Belgium and Switzerland really are tough markets but I think he's done a decent job of exiting/partnering to build scale when he's disadvantaged and working out solutions & Virgin Media is a slam dunk. 

I agree that he's sold the companies best asset but I do think he got a reasonable price for it and I don't think the rest of the company was/is being valued appropriately and it's reasonable to assume selling at a fair price to arbitrage the value gap between public/private is an "ok" strategy.  I'm probably too cynical but I'm skeptical about whether people would think so poorly of him if the stock price was $37-$40 USD with no fundamental change to the business...

I should have been clearer when I was criticizing Fries.....he/they have done a great job buying/selling/arbitraging/buybacks, no question, but his execution with operations has been atrocious, especially if you compare to a well run cable operation.  His propensity to brag and his overconfidence in aggressive targets that he made a couple years ago have come back to bite him hard.  The stock would not have fallen this far if investors didn't lose trust in him...you can tell he's just deceiving/full of shit when he talks, constantly overhyping potential positives and completely glossing over any negatives, constantly spinning nonsense.  Look at his results on their commercial business, how late he was to identify that as a huge opportunity.  Always putting down his American peers, or trying to justify their underperformance against say Chtr, even when nobody asked specifically about that. I mean the company has grown rebased cash flows every qtr for a decade (this is more because of the advantaged assets rather than mgmt execution and would have grown faster with say Rutledge running things imo) and the stock is selling like its going under (which by itself does not bother me, have owned it for 5 years and I am in the negative).....and mgmt is a big reason.  He overpromised and underdelivered, and that is a big problem for a public company, nobody can argue against that last point, it's a fact.

[bigbluffzinc]

Yeah ok fair enough.  I don't disagree with anything you said. 

Klarman picked up a 3.5% position or so this last quarter.  Not a big deal but good news nonetheless. 

[Spekulatius]

Does anyone know (done any correlation work with other UK businesses) how much of this is Brexit?  I know it's been mentioned before but don't think there was much of a response.  Sterling has held up pretty well while LBTYK has taken it on the chin & I don't see this business as particularly vulnerable (particularly with the optionality if the deal closes) to a deteriorating domestic situation in the UK but I can't really see material business deterioration ex-Brexit either.  I initiated at $26-$27 and have been adding but I don't want to miss something obvious either...   

Obviously funds betting on a bigger VOD deal/buyout/speculating if Brian missed Sky he may do something with LBTYK are going to have to unwind & that can bring the opportunity.  But given the magnitude of the decline I'm concerned I've missed something...  After re-reading the 10Q's/transcripts I don't see what & would love (hate...) to have someone point out the magnitude of Brexit/etc & why this is a disaster.  I know Howard Marks said levels in the UK are still too high to make anything (debt) investable but I don't have any numbers.    

I am actually on the other side of just about everyone on this forum and think Fries is an "ok" and relatively transparent CEO.  I think Belgium and Switzerland really are tough markets but I think he's done a decent job of exiting/partnering to build scale when he's disadvantaged and working out solutions & Virgin Media is a slam dunk. 

I agree that he's sold the companies best asset but I do think he got a reasonable price for it and I don't think the rest of the company was/is being valued appropriately and it's reasonable to assume selling at a fair price to arbitrage the value gap between public/private is an "ok" strategy.  I'm probably too cynical but I'm skeptical about whether people would think so poorly of him if the stock price was $37-$40 USD with no fundamental change to the business...

I should have been clearer when I was criticizing Fries.....he/they have done a great job buying/selling/arbitraging/buybacks, no question, but his execution with operations has been atrocious, especially if you compare to a well run cable operation.  His propensity to brag and his overconfidence in aggressive targets that he made a couple years ago have come back to bite him hard.  The stock would not have fallen this far if investors didn't lose trust in him...you can tell he's just deceiving/full of shit when he talks, constantly overhyping potential positives and completely glossing over any negatives, constantly spinning nonsense.  Look at his results on their commercial business, how late he was to identify that as a huge opportunity.  Always putting down his American peers, or trying to justify their underperformance against say Chtr, even when nobody asked specifically about that. I mean the company has grown rebased cash flows every qtr for a decade (this is more because of the advantaged assets rather than mgmt execution and would have grown faster with say Rutledge running things imo) and the stock is selling like its going under (which by itself does not bother me, have owned it for 5 years and I am in the negative).....and mgmt is a big reason.  He overpromised and underdelivered, and that is a big problem for a public company, nobody can argue against that last point, it's a fact.

Yes, that’s it in a nutshell. I also believe that running a cable business in Europe is much harder than in the US - the economics are just not as good, because pricing is lower.

[rogermunibond]

Spek it's funny because that's exactly the reason that Fries et al. gave as the opportunity many years ago.

[Spekulatius]

Spek it's funny because that's exactly the reason that Fries et al. gave as the opportunity many years ago.

I know this, but here we are a few years later and the situation is still the same. No surprise, since you can watch satellite TV for free in Europe. I think Broadband internet, which is still lacking in many regions, is there best shot. The national telecoms however are willing to hit hard on pricing before  conceding market share.

[ander]

CNBC full interview w/ Malone - at 27:30 Malone goes into detail re: thoughts on Liberty Global / Europe

https://www.cnbc.com/video/2018/11/14/watch-cnbcs-full-exclusive-interview-with-liberty-media-chairman-john-malone.html