Author Topic: LILA - Liberty Global Latin America tracker  (Read 98889 times)

muscleman

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Re: LILA - Liberty Global Latin America tracker
« Reply #110 on: November 13, 2015, 09:13:19 AM »
When thinking about how a potential deal could be structured, don't forget CWC's tax assets ($5+ billion of UK capital losses and $3+ billion of US trading losses).  Now, these assets are currently "stranded" at CWC since they have no UK/US operations.  LiLAC wouldn't be able to use these assets either... at least not directly. 

But remember, LiLAC is a tracker, so I suppose it's possible for LBTY to send cash over to LiLAC to help fund the deal, and then immediately after the deal is closed LiLAC could send the UK tax asset over to LBTY.  Essentially, this would "un-strand" the CWC UK tax asset since LBTY would be able to use it...

I haven't done much diligence on CWC and apologize for my ignorance, but could you point to where the tax assets are disclosed in the public financial statements?  TYIA.

See note 2.7 (pages 111-112) in their annual report:

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The US$7,339 million (31 March 2014 US$6,643 million) tax losses include UK capital losses of US$5,507 million (31 March 2014 US$5,421 million). Tax losses have not been recognised as there are insufficient taxable profits to utilise those losses in future periods.

Compare the sheer size of these losses with CWC's EV of ~$8bn. I think taxes could even be the main driver behind the transaction. Though usually capital losses can only be used to offset capital gains, CWC's losses can be of tremendous value for Liberty.

By the way, Malone is holding his shares through a LLC holding. I don't know enough about US corporate tax law but there might be a way to structure so that his holding can accept a (part) cash offer without paying tax on the gains.

I think what will happen is that stock is issued to exchange with CWC and then a buyback is announced. This is indirect cash offer but saves the tax payment.

We will see how this goes. If it is LILA shares or Liberty Global shares.


Liberty

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Re: LILA - Liberty Global Latin America tracker
« Reply #111 on: November 16, 2015, 10:44:10 AM »
Liberty Global Announces Recommended Share Acquisition of Cable & Wireless Communications

http://www.businesswire.com/news/home/20151116006312/en/Liberty-Global-Announces-Recommended-Share-Acquisition-Cable
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rogermunibond

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Re: LILA - Liberty Global Latin America tracker
« Reply #112 on: November 16, 2015, 11:46:25 AM »
So it looks like most of CWC will end up in LBTYA/LBTYK and about 20% or in LILA/LILAK.  Interesting comment in the release that the Liberty intergroup holding of CWC could end up getting spun out to LILA/LILAK shareholders eventually.

Own The Rails

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Re: LILA - Liberty Global Latin America tracker
« Reply #113 on: November 16, 2015, 11:56:48 AM »
Buffett and Lou Simpson both added modest positions in LILAC last quarter: http://www.dataroma.com/m/activity.php?sym=LILAK&typ=a

marazul

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Re: LILA - Liberty Global Latin America tracker
« Reply #114 on: November 16, 2015, 12:26:33 PM »
They did not purchase any LILA. They owned LBTY so they received those shares.

folivera13

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Re: LILA - Liberty Global Latin America tracker
« Reply #115 on: November 16, 2015, 01:45:02 PM »
So it looks like most of CWC will end up in LBTYA/LBTYK and about 20% or in LILA/LILAK.  Interesting comment in the release that the Liberty intergroup holding of CWC could end up getting spun out to LILA/LILAK shareholders eventually.

LBTYA/K would receive spin-off of intergroup interest. Current LILA/K would not receive the intergroup interest.

ni-co

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Re: LILA - Liberty Global Latin America tracker
« Reply #116 on: November 16, 2015, 01:52:14 PM »
This offer is carefully crafted to disguise which shareholder group ends up with which ratio of LBTYA/K vs LILA/K shares. After the first careful read of the whole thing I still don't know which one to choose to receive the maximum LILA/K amount. I'm tempted to just go with Malone.

What exactly is the difference between Dual Share offerings I (Malone) and II, and the LiLAC Alternative of the "Recommended" Offer?

My first impression is that the "blended" rates of the offers are more or less just a nominal amount and not the real value of the offer. Why would Malone and the others accept lower prices?
« Last Edit: November 16, 2015, 01:58:16 PM by ni-co »

muscleman

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Re: LILA - Liberty Global Latin America tracker
« Reply #117 on: November 16, 2015, 02:18:17 PM »
This offer is carefully crafted to disguise which shareholder group ends up with which ratio of LBTYA/K vs LILA/K shares. After the first careful read of the whole thing I still don't know which one to choose to receive the maximum LILA/K amount. I'm tempted to just go with Malone.

What exactly is the difference between Dual Share offerings I (Malone) and II, and the LiLAC Alternative of the "Recommended" Offer?

My first impression is that the "blended" rates of the offers are more or less just a nominal amount and not the real value of the offer. Why would Malone and the others accept lower prices?

I read through this and also cannot understand the differences between I and II.


Munger_Disciple

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Re: LILA - Liberty Global Latin America tracker
« Reply #118 on: November 16, 2015, 02:56:23 PM »
From the press release:

Quote
The Offer includes three alternative proposals which CWC shareholders can elect to receive, as described in detail in the Rule 2.7 announcement: a recommended proposal and two alternative proposals. CWC shareholders are encouraged to review that document for details.

Where can one find this Rule 2.7 announcement?


jay21

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