Author Topic: LBTYA - Liberty Global  (Read 242075 times)

rogermunibond

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Re: LBTYA - Liberty Global
« Reply #720 on: October 10, 2019, 01:34:38 PM »
Does Switzerland have different economics for fiber overbuild?


cameronfen

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Re: LBTYA - Liberty Global
« Reply #721 on: October 10, 2019, 07:14:37 PM »
"Our valuation analysis suggests a fair value range of 4.6 – 5.2 billion Swiss francs (enterprise value) for UPC on a standalone basis if its performance were in line with that of peer cable operators"

Not a loss since even at that price it's multiples (I believe still in excess of 3x) of what they put in including dividends, etc.
But my question to the quote above would be is ISS accounting for the synergies?

It's the comment from ISS "appears to have debatable long-term strategic merit" that I find most confusing.  Are they questioning the logic of combining cable/broadband with wireless?  That strategy underpins most telecom M&A over the past 3 years.

They also said:

"Long-term benefits of the 6.3B Swiss-franc deal aren't obvious, ISS says, "as cable’s competitiveness vis-a-vis fibre and 5G is questionable," even if there's a strategic advantage in the short to mid-term."

Both statements lead me to believe they clearly don't know the first thing about this industry.

My opinion is obviously in the minority on this, but even experts disagree on cable's competitiveness versus 5G.  Currently, 5G has issues on the wireless broadband front, but there is a relatively good chance telecom can figure it out.  I can't really handicap the exact probability but it's not so insignificant that it isn't a risk. 

scorpioncapital

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Re: LBTYA - Liberty Global
« Reply #722 on: October 10, 2019, 08:40:05 PM »
5g is also in part an industrial technology not an end user one. I mean it may be for end users too but what will be the cost advantage and will there be home applications needing over 1gbps data stream which is what one can get with cable now. If 5g gives you the same rate at the same price...

WayWardCloud

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Re: LBTYA - Liberty Global
« Reply #723 on: October 10, 2019, 10:31:52 PM »
"Our valuation analysis suggests a fair value range of 4.6 – 5.2 billion Swiss francs (enterprise value) for UPC on a standalone basis if its performance were in line with that of peer cable operators"

Not a loss since even at that price it's multiples (I believe still in excess of 3x) of what they put in including dividends, etc.
But my question to the quote above would be is ISS accounting for the synergies?

It's the comment from ISS "appears to have debatable long-term strategic merit" that I find most confusing.  Are they questioning the logic of combining cable/broadband with wireless?  That strategy underpins most telecom M&A over the past 3 years.

They also said:

"Long-term benefits of the 6.3B Swiss-franc deal aren't obvious, ISS says, "as cable’s competitiveness vis-a-vis fibre and 5G is questionable," even if there's a strategic advantage in the short to mid-term."

Both statements lead me to believe they clearly don't know the first thing about this industry.

My opinion is obviously in the minority on this, but even experts disagree on cable's competitiveness versus 5G.  Currently, 5G has issues on the wireless broadband front, but there is a relatively good chance telecom can figure it out.  I can't really handicap the exact probability but it's not so insignificant that it isn't a risk.

Oh yeah, definitely! Just to be clear, I'm not saying 5G is a technology to be dismissed or that it's not eventually going to support a growing part of our data transfers, maybe even some from home or work. My view is just that convergence is inevitable because ultimately consumers don't care whether their internet comes from a cable-co or a tel-co. They want it to be everywhere, on every device, fast and reliable. And it's all already wireless anyway (WiFi/4G/5G/balloons/satellites/whatever). 5G home access isn't there yet while cable already offers 1G WiFi and can easily go up to 10G. Also the cost per Gb of data is incredibly cheaper and the infrastructure is already there so it's a no-brainer right now. In the future, if last mile delivery to the home does end up being more efficient beaming 5G around the whole block than pulling cables to each house then cable cos can do just that. They already have the strongest backbone infrastructure which is what really matters.

I guess all I'm saying is ISS is wrong because:
1/There's strong and growing overlaps between the two services so FMC makes tremendous economic sense in terms of synergies.
2/5G is nothing but a new (costly and not there yet) last mile protocol. It's exciting and all, I just don't think it changes profoundly anything. It's only been taunted as a cable killer by Verizon because they were sour to have failed to acquire Charter.

(I'm totally biased by the way  ::))
« Last Edit: October 11, 2019, 03:05:51 AM by WayWardCloud »


scorpioncapital

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Re: LBTYA - Liberty Global
« Reply #725 on: October 14, 2019, 02:37:57 AM »
Amazing how difficult it is to get rid of this asset. I wonder how many other assets in the world would have a very different valuation If they were put up for sale. Of course having a large shareholder block of the acquirer that is intransigent doesn't help.

I don't quite understand why liberty just didn't offer an 8 Percent discount which would be the same thing as taking back 8 percent in shares. Tax reasons ?
« Last Edit: October 14, 2019, 02:40:26 AM by scorpioncapital »

thefatbaboon

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Re: LBTYA - Liberty Global
« Reply #726 on: October 14, 2019, 03:56:41 AM »
Why is it the same?  You think the shares are worthless?


ander

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Re: LBTYA - Liberty Global
« Reply #727 on: October 14, 2019, 06:50:00 AM »
Scorpion - I disagree. Better to take the shares than the discount. They can later sell the shares, no? Unless like thefatbaboon is asking that you think the shares are worthless which I don't.



Some more detail in this press release re: Fries comments, the point that 3 proxy advisors support the deal, and they disagree with ISS.


DENVER, Colorado--(BUSINESS WIRE)-- Liberty Global plc(LBTYA) (“Liberty Global”) and Sunrise Communications AG (“Sunrise”) today announced an agreement whereby Liberty Global(LBTYA) will support Sunrise’s rights offering related to the acquisition of UPC Switzerland1.

Liberty Global (LBTYA) has agreed to support the Sunrise rights offering up to an aggregate amount of CHF 500 million2 through the purchase of tradeable subscription rights at market prices and the subsequent purchase of newly issued shares, if any, in the rights offering. If fully utilized, Liberty Global’s resulting ownership would reach 7.8% at current market prices3. Sunrise and Liberty Global(LBTYA) have also agreed that Liberty Global(LBTYA) will receive one board seat nomination as long as its shareholding exceeds 5%. All other terms of the CHF 6.3 billion transaction remain unchanged.

“We have always believed in the logic of this combination. It creates a national powerhouse that will provide a fully-converged challenger to Swisscom and represents a smart and accretive transaction for both Sunrise and Liberty shareholders,” said Mike Fries, CEO of Liberty Global(LBTYA). “We are also happy to support the financing. Both investors and consumers win when this deal closes. Olaf and his team are excellent operators and are uniquely qualified to realize the strategic and financial benefits of the merger.”

Sunrise shareholders will vote to approve the relevant capital increase required to consummate the transaction on October 23rd. The Swiss regulatory authority, WEKO, approved the deal without conditions, citing the fact that it will create the second largest telecommunications carrier in Switzerland and that the combination will stimulate competition. Glass Lewis, Ethos, zRating, three leading proxy advisory firms, recommended Sunrise shareowners approve the capital increase.

Separately, ISS issued a flawed report recommending that Sunrise shareholders vote against the capital increase. While ISS found the combined entity “could reasonably provide a strategic advantage” over the near and medium term, it raised unfounded concerns about the long-term viability of UPC’s fiber-rich HFC networks versus emerging technologies and, among other errors, misstated both current and historical transaction multiples.

“ISS demonstrated a surprisingly poor understanding of the telecom industry in this report,” said Fries. “Fixed-mobile convergence is the future. Industry leaders, regulators and sector analysts all agree on that point. European operators have already completed over €100 billion in transactions just like this one, and at even higher multiples. Nearly all of these transactions involved cable networks precisely because our systems are fiber-rich and future-proof. That’s just one of the many reasons we are so confident in UPC Switzerland even if this deal does not close. We’ve already launched gigabit speeds throughout Switzerland as well as 20 cities across Europe and, unlike telecom incumbents, have the fastest and most efficient path to 10 gig speeds down the road.”

reader

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Re: LBTYA - Liberty Global
« Reply #728 on: October 14, 2019, 11:43:31 AM »
Capital keeps pouring into the U.K. broadband market  :o

KKR Acquires Majority Stake in Hyperoptic

https://ir.kkr.com/news-releases/news-release-details/kkr-acquires-majority-stake-hyperoptic

"Founded in 2011, Hyperoptic benefits from a full fibre network covering 43 towns and cities across the UK, with gigabit broadband services passing almost 400,000 homes and businesses."


"Currently, only 8% of the UK has access to full fibre and less than half of that to symmetrical gigabit services.

We are confident that with the support of KKR and their significant expertise enabling high-growth businesses, our ambitious infrastructure plans to build our hyperfast network out to two million homes by 2021 and five million by 2024 will be realised.”