Author Topic: LILA - Liberty Global Latin America tracker  (Read 135855 times)

Munger_Disciple

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Re: LILA - Liberty Global Latin America tracker
« Reply #390 on: October 10, 2019, 10:15:30 AM »
Quote
I would be careful about Malone swooping in as this could very well result in more shareholder fleecing.

This always has been a concern with Malone. He is always for himself; minority shareholders need to be careful that his interests are not against theirs. The trouble is that sometimes it is hard to tell which side he is on. I wish he were more like Buffett.
« Last Edit: October 10, 2019, 10:18:38 AM by Munger_Disciple »


netnet

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Re: LILA - Liberty Global Latin America tracker
« Reply #391 on: March 17, 2020, 01:37:27 PM »
LILA announced a share repurchase plan today (March 17th).

alwaysinvert

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Re: LILA - Liberty Global Latin America tracker
« Reply #392 on: July 31, 2020, 02:33:58 PM »
I guess nobody will care at all but I think LILA is interesting here.

- Wednesday after close they bought Telefonica Costa Rica for $500m (the deal Tigo backed out of at a somewhat higher price). This also explains why they have been timid with buybacks.
- Yesterday before US market open Tigo reported decent numbers, issued some cautiously optimistic statements and the stock ran +5-7%

These two things together implies that Q2 and beyond has a good chance of being pretty good for LILA. Yet LILA opened DOWN yesterday (has traded up somewhat since but is still essentially flat since the big drawdown).

Additionally:

- America Movil also reported strong Latam numbers under the circumstances
- VTR issued notes a month ago which lowered their cost of capital and extended their maturities: https://www.businesswire.com/news/home/20200702005104/en/VTR-Completes-Issuance-1.15-Bn-New-Notes
- Likewise Tigo's Luxembourg listed bonds are now priced the same as pre-covid.

What exactly is the rational reason why LILA has not had any discernible bounceback in the equity at this point? Maybe they will report a giant stinker and have a horrible rest of 2020, but if so how much sense does it make to do a completely optional $500m acquisition when you are already more levered than all your peers? I interpret it as a huge signal that management thinks all will be well and they are exiting cash preservation mode. The market is yawning and maybe management has earned that response, but I suspect there is informational value there.

ratiman

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Re: LILA - Liberty Global Latin America tracker
« Reply #393 on: August 01, 2020, 09:17:02 AM »
It's funny how this was going to take over the world a few years and now it's crickets. Does anyone have an idea what the valuation looks like after the AT&T and Costa Rica deals? I have something like $1450 ebitda on the current business, $300 for AT&T, and $75 for Costa Rica. Conservatively that's $1825 with $9B debt. At 6x the valuation on 190M shares would be $10.
« Last Edit: August 01, 2020, 11:17:25 AM by ratiman »

alwaysinvert

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Re: LILA - Liberty Global Latin America tracker
« Reply #394 on: August 05, 2020, 01:54:05 PM »

Foreign Tuffett

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Re: LILA - Liberty Global Latin America tracker
« Reply #395 on: August 05, 2020, 07:01:18 PM »
It's funny how this was going to take over the world a few years and now it's crickets. Does anyone have an idea what the valuation looks like after the AT&T and Costa Rica deals? I have something like $1450 ebitda on the current business, $300 for AT&T, and $75 for Costa Rica. Conservatively that's $1825 with $9B debt. At 6x the valuation on 190M shares would be $10.

The debt load makes it tough for me to get excited about this. I also think it is an exceptionally difficult company to understand.
Former Teldar Paper Vice President

Munger_Disciple

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Re: LILA - Liberty Global Latin America tracker
« Reply #396 on: August 05, 2020, 08:04:55 PM »
One problem I have with LILA's financials is that they make it extremely difficult (almost impossible) to estimate the pro-rata net debt and pro-rata EBITDA attributable to LILA shareholders (sub-divisions of LILA have minority interests). The opaqueness is by design I suspect. Millicom (unlike LILA) does a terrific job of providing this valuable information which makes it straight forward to value the company. Raising additional equity at quite a low valuation seems weird but I guess they have no other choice if they want to do the deal. It is incumbent upon the management to at least explain why Telefonica is such an awesome deal.

NotSoWise

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Re: LILA - Liberty Global Latin America tracker
« Reply #397 on: August 06, 2020, 01:12:57 AM »
It supposed to be an all cash deal, but recently they realized that things were worse (Q2 results) and will take longer to recover. Without additional money they could potentially breach covenants (OCF decline, acquisition costs, more debt) and were short cash to close. Buying a mobile at ~7x pre synergies and issuing stock at low bottom valuation would not make it a good return deal. Strategically makes sense, but return wise its not great.

So far they did possibly one good deal (AT&T) and rather two mediocre (C&W - Malone forced, Costa Rica).

"Funny" thing was announcing buybacks (not buying back anything) and then right after issuing stock.

All the above put some question marks on CEO competency. The sooner they merge with TIGO the better - so TIGO CEO could take over (subject to valuation).


alwaysinvert

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Re: LILA - Liberty Global Latin America tracker
« Reply #398 on: August 06, 2020, 02:38:38 AM »
It supposed to be an all cash deal, but recently they realized that things were worse (Q2 results) and will take longer to recover. Without additional money they could potentially breach covenants (OCF decline, acquisition costs, more debt) and were short cash to close. Buying a mobile at ~7x pre synergies and issuing stock at low bottom valuation would not make it a good return deal. Strategically makes sense, but return wise its not great.

So far they did possibly one good deal (AT&T) and rather two mediocre (C&W - Malone forced, Costa Rica).

"Funny" thing was announcing buybacks (not buying back anything) and then right after issuing stock.

All the above put some question marks on CEO competency. The sooner they merge with TIGO the better - so TIGO CEO could take over (subject to valuation).

The Costa Rica deal was finalized a week ago - I think they would have had a pretty good idea what Q2 results were by then. I suspect that insiders (who have committed to taking their pro rata shares) want to buy more stock at current prices and the deal structure makes sense for that reason even if the deal is value neutral to the company.

What would make further sense if Tigo-LILA is not happening soon would be for them to swap their Panama and Costa Rica assets.

NotSoWise

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Re: LILA - Liberty Global Latin America tracker
« Reply #399 on: August 06, 2020, 02:55:54 AM »
Agree re Malone/ Zinterhofer - expect them to oversubscribe significantly to buy at some USD 6-7, 25% discount after price drops to USD 8-9. Last time Zinterhofer was adding between USD 15-18, so would want to average down, Malone even more so.

As for TIGO-LILA, I think its inevitable given obvious reasons, just hard to say when.
Would there be any willing buyer for the merged entity - i.e. some LATAM champion or else? Just wonder if there would be any exit premium at some point...

As for CR deal - EV500 at ~7x pre synergies, at 4x debt, so 3x or USD 210m from CF/ other sources - they wrote debt/ and/or equity in press release. So why do they need USD 350m? Lets say some USD 100-200m for CR and the remaining -150-250m? I thought more about this stock issue. One thing is to issue stock at low price (high value) and then swap for a stock with high price (low value) (e.g. merger) - clearly you destroy value. Another is to ask all shareholders for more money pro-rata to their shareholding to do a deal/ M&A. In such situation, shareholders who oversubscribed gain more value, at the expense of the ones who didnt.

Do you guys know what is the average value-wise % of current shareholders to subscribe RI?
« Last Edit: August 06, 2020, 03:38:23 AM by NotSoWise »