Manx Telecom News

[MaraMan]

This hit the news today resulting a in a 15% rise over the pre-bid price.

https://otp.tools.investis.com/clients/ ... id=1239677

I have had this in my HYP for a while now due to it's healthy 5.31% yield. It represents 4.2% of my HYP (thanks new HYPTUS).

I don't have any intention of tinkering with it in the forseeable future, its a doing a goob job of making up for my notional losses on VOD in that sector.

Sorry if this is in the wrong place.

MM

[Ricksure]

Thanks for the link, I bought MANX for my SIPP HYP for about three years ago, a nice little earner

[TheMotorcycleBoy]

This hit the news today resulting a in a 15% rise over the pre-bid price.

https://otp.tools.investis.com/clients/ ... id=1239677

I have had this in my HYP for a while now due to it's healthy 5.31% yield. It represents 4.2% of my HYP (thanks new HYPTUS).

I don't have any intention of tinkering with it in the forseeable future, its a doing a goob job of making up for my notional losses on VOD in that sector.

Sorry if this is in the wrong place.

MM

Wow. We've held MANX just after we started investing. Alas we bought at about 180-190ish. So most of the time the holding has been in the red, but obviously paying out divs.

I looked at our foli last night to check some limit-buys on other stocks, and couldn't believe my eyes upon seeing the rise - but I didn't pursue researching the reason. So many thanks for your post explaining why.

Since we are new to investing.....what should we do (we hold the holding in an ISA)? Should we just hold on? And if the deal goes through will our MANX holding just disappear from our stocks listing and our cash balance get credited by:

Number of shares x £2.15 ?

Sorry to sound dumb, but this is the first time we've experienced this in any of our holdings.

many thanks
Matt and Mel

[IanTHughes]

This hit the news today resulting a in a 15% rise over the pre-bid price.

https://otp.tools.investis.com/clients/ ... id=1239677

Since we are new to investing.....what should we do (we hold the holding in an ISA)? Should we just hold on? And if the deal goes through will our MANX holding just disappear from our stocks listing and our cash balance get credited by:

Number of shares x £2.15 ?

Sorry to sound dumb, but this is the first time we've experienced this in any of our holdings.

Well, first of all the takeover has to be approved:

The Acquisition will be put to Manx Shareholders at the Court Meeting and at the General Meeting. In order to become Effective, the Scheme must be approved by a majority in number of the Scheme Shareholders voting at the Court Meeting, either in person or by proxy, representing at least 75 per cent. in value of the Scheme Shares voted. In addition, the Manx Resolutions must be passed by the requisite majority or majorities at the General Meeting. The Scheme will also need to be sanctioned by the Court. Finally, a certified copy of the Court Order must be delivered to the Companies Registry for registration, and the Companies Registry must register a certified copy of the Court Order, together with a copy of the Scheme Document and all documents required to be annexed thereto (if any) on Manx's file, upon which the Scheme will become Effective.

But yes, assuming it is approved as above, your holding will be "sold" at 215p per share with the proceeds being credited to your brokerage account on a yet to be determined date. You will not need to do anything and you will not be charged any commission for the "sale".


Ian

[TheMotorcycleBoy]

Many thanks for your reply, Ian.

Well, first of all the takeover has to be approved

Ahh, of course, yes I now remember how protracted some of my employer's bids and takeovers have been over the years.

But yes, assuming it is approved as above, your holding will be "sold" at 215p per share with the proceeds being credited to your brokerage account on a yet to be determined date. You will not need to do anything and you will not be charged any commission for the "sale".

Ok, cheers. So as long as the cash stays in the ISA (indeed it will be used to re-purchase a new asset), are we still Tax-exempt on any monies paid out?

thanks
Matt

[IanTHughes]

Many thanks for your reply, Ian.

Well, first of all the takeover has to be approved

Ahh, of course, yes I now remember how protracted some of my employer's bids and takeovers have been over the years.

But yes, assuming it is approved as above, your holding will be "sold" at 215p per share with the proceeds being credited to your brokerage account on a yet to be determined date. You will not need to do anything and you will not be charged any commission for the "sale".

Ok, cheers. So as long as the cash stays in the ISA (indeed it will be used to re-purchase a new asset), are we still Tax-exempt on any monies paid out?

Oh yes, the proceeds will be within the ISA just as the shares were, it is not a contribution to the ISA. Also, there will be no Capital Gains Tax to worry about, assuming of course there is a gain.


Ian

[TheMotorcycleBoy]

Oh yes, the proceeds will be within the ISA just as the shares were, it is not a contribution to the ISA. Also, there will be no Capital Gains Tax to worry about, assuming of course there is a gain.

Thanks again,
Matt

[tjh290633]

If it is going to be a long time before you get the cash, and the price is close to the offer, you can always sell in the market if you can see a better home for the money. It will incur the brokerage fee, of course.

TJH

[OLTB]

Hi Matt - a few of us had this situation with Sky recently when Fox bid. Towards the end Comcast made a bid and the end result was a really enhanced offer on the initial one. Those that sold early (mostly) regretted it and so if I were ever in the same position again, I would just wait until the market traded, rather than go early. Just my opinion.

Cheers, OLTB.

[TheMotorcycleBoy]

Thanks TJH,

Selling up now, has crossed my mind. The pros are that in if in the eventuality that deal doesn't proceed then and stock falls and fails to maintain it's divs, then a quick sale bags the cash. The cons (?) are that the share holders say they want more £££, and buyers cough up, and we've missed the bigger bung.

As it stands if we sell now at £2.14, then at a rough guess, including divi flows I guess we've made about 17% profit in just under a year.

What do you reckon? There's certainly lots of other cheap looking equity about right now....

Matt

[TheMotorcycleBoy]

Hi Matt - a few of us had this situation with Sky recently when Fox bid. Towards the end Comcast made a bid and the end result was a really enhanced offer on the initial one. Those that sold early (mostly) regretted it and so if I were ever in the same position again, I would just wait until the market traded, rather than go early. Just my opinion.

Cheers, OLTB.

Sorry OLTB my last post just crossed with yours......and yours is a good point.....decisions, decisions.

Buyer did only offer 11x forecast earnings.

[tjh290633]

The point made about counterbids above is valid. I try to wait until an offer has been made unconditional before I do anything, and also wait for the XD date if there is a dividend to come, before taking any action.

TJH

[scottnsilky]

From what I understand from the link, 215p per share includes the interim dividend of 7.9p, which we would be getting anyway, thus the offer is 207p per share, still reasonable, but what do I do with the money? I already have enough cash for another addition to my portfolio, now I'll have more! I find it a scary time to invest at the moment.....?
dp

[TheMotorcycleBoy]

Well I can certainly think of a few equities that I'd spend cash on now. So any cash is good...

However, regards the offer of 215p per share, I think that as a takeover amount it is a little bit stingy. I did my own attempt at valuing MANX a few months ago using DCF and EPV and arrived at various figures between 195 - 250. Simply Wall Street (https://simplywall.st/AIM:MANX if you supply an email address it will give you a share valuation) value them at 384p !!

So I'm thinking of hanging on for a while.

thanks Matt

[Arborbridge]

Well I can certainly think of a few equities that I'd spend cash on now. So any cash is good...

However, regards the offer of 215p per share, I think that as a takeover amount it is a little bit stingy. I did my own attempt at valuing MANX a few months ago using DCF and EPV and arrived at various figures between 195 - 250. Simply Wall Street (https://simplywall.st/AIM:MANX if you supply an email address it will give you a share valuation) value them at 384p !!

So I'm thinking of hanging on for a while.

thanks Matt

I've never seen that site before, and it looks interesting. Can you say whether you've noticed it giving free cash flow cover for dividends? I notice it mentions cover by earnings, but can't spot cash - I expect it is there buried somewhere. Any ideas?

Thanks,

Arb.

[TheMotorcycleBoy]

Well I can certainly think of a few equities that I'd spend cash on now. So any cash is good...

However, regards the offer of 215p per share, I think that as a takeover amount it is a little bit stingy. I did my own attempt at valuing MANX a few months ago using DCF and EPV and arrived at various figures between 195 - 250. Simply Wall Street (https://simplywall.st/AIM:MANX if you supply an email address it will give you a share valuation) value them at 384p !!

So I'm thinking of hanging on for a while.

thanks Matt

I've never seen that site before, and it looks interesting. Can you say whether you've noticed it giving free cash flow cover for dividends? I notice it mentions cover by earnings, but can't spot cash - I expect it is there buried somewhere. Any ideas?

Thanks,

Arb.

Hi Arb,

My workings are at home....and I'm at work now. However just found this http://financials.morningstar.com/ratio ... region=gbr which suggest FCF covered divs in 2016, but not quite so well in 2017....Hmm.....perhaps 215p is reasonable on that bias.

Just found a nice piece of commentary here:
https://www.telecomtv.com/content/mobil ... rth-34487/

but can't spare too much of my employer's hours right to fully process but if you get a chance give it a read, and tell us what you make of it.

thanks Matt

PS I think I might've read somewhere yesterday (from Gary Lamb), something about concerns about their dividend policy going forward and keeping on track with 5G et al. investment overheads etc. but can't find it right now)

[TheMotorcycleBoy]

Google with

ft manx telecom go private

This should be first hit or thereabouts:

One of the UK’s few remaining listed telecoms companies is set to go private after recommending a bid from an infrastructure fund that specialises in marine and energy companies.

Manx Telecom, the main operator in the Isle of Man, has accepted a £255m cash offer from Basalt Infrastructure Partners. It has been listed since 2014 and is the latest UK telecoms company to be bought by an infrastructure fund, after the acquisitions of CityFibre and Gigaclear. Infrastructure investors have also backed smaller groups including Community Fibre, Hyperoptic and Airband.

The UK listed sector now consists of BT, Vodafone, TalkTalk, Gamma Communications and a handful of very small competitors.

Manx shares surged 15 per cent to 214.66p on the news, although still shy of the 215p offer price.

Basalt owns the Wightlink ferry company that operates between the UK mainland and the Isle of Wight. It also owns North Star Shipping, which provides emergency services for the North Sea oil and gas industry, the Madrid Metro light rail in the Spanish capital and a number of energy assets in the US and Europe. It had not invested in telecoms until the Manx offer.
It first approached the company in January, according to Manx chief executive Gary Lamb, before agreeing the sale at a value equivalent to 11 times projected earnings. Manx, which has previously been owned by private equity companies HgCapital and CPS Partners, did not sound out other potential buyers as the bid was unsolicited.

Mr Lamb said the deal made sense given that the company would struggle to invest in upgrading its network to 5G and full fibre optic connections while maintaining its progressive dividend policy, which has been an attraction for investors. It is also investing in a start-up business called Goshawk that aims to improve mobile phone services for hard of hearing users.

He said that laying full fibre across the island would cost about £30m and ensure that Manx remained dominant in its home market.

Manx was founded in 1986 as a part of BT but was included in the O2 demerger at the turn of the century and was a test bed for 3G networks. It was sold to private equity in 2010 after Telefónica bought O2. The price offered, which excludes £63m of debt, is 51 per cent higher than its float price, according to Megabuyte research.


Matt

[Arborbridge]

My workings are at home....and I'm at work now. However just found this http://financials.morningstar.com/ratio ... region=gbr which suggest FCF covered divs in 2016, but not quite so well in 2017....Hmm.....perhaps 215p is reasonable on that bias.

Just found a nice piece of commentary here:
https://www.telecomtv.com/content/mobil ... rth-34487/

but can't spare too much of my employer's hours right to fully process but if you get a chance give it a read, and tell us what you make of it.

thanks Matt

PS I think I might've read somewhere yesterday (from Gary Lamb), something about concerns about their dividend policy going forward and keeping on track with 5G et al. investment overheads etc. but can't find it right now)

Thanks for the helpful morningstar link. I didn't mean so much for Manx telecom in particular, but it was more about the simply wall st site - I wondered if they had a display for cash flow cover of dividends of shares, rather than just earnings cover.

Arb.

[TheMotorcycleBoy]

I just sold my MANX shares at 215p. And topped up our Victrex VCT at 2302p.

[monabri]

Simply Wall St claims to " cover 41 exchanges across 27 markets" and "We analyse 75,000 stocks every 6 hours using our internationally recognised model ".

That's why, until very recently, the div cover for BATS was reported as 11.? (Its only just been corrected). Computer says " No".
Where is the check that says " nah, that's rubbish"?

Have a look at the SWS model for Just Group....all looks rosey. Then we have news in Just Group discussed here:-

viewtopic.php?f=33&t=15710


Another example: the SWS analysis reckons that SSE has a P/E of 42.

I've subscribed to SWS for 2 years now but there have been MANY occasions when I've seen (obvious) errors.

SWS is useful but I urge caution.