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LG goes south yet again and drags CWC down with it. Like it or not we are completely tied to the LG price on the NASDAQ at the moment and the yanks have taken against them. They have been in freefall for the past 2 weeks and no sign of a change for the better thus far.
Me too, but only as you say because I am stuck to know where to put the cash if I sold. My finger was hovering over RDSB until the oil price took another dive and Shell also have to swallow BG in the interim. Difficult times with many warnings of divi cuts to come in companies where earnings cover is low.
Hi Grayling. Have decided to receive the LG paper and special divi. I appreciate that LG division are small but believe there is mediu term growth in the stock and can't think of anything better at the moment. Don't be too phased by these weekly fluctuations.
Thanks Comsman. You still holding?
Take a look at the NASDAQ it is a veritable bloodbath and LG at 5% down is a relatively minor drop compared to some losses on there today (Pacific Biosciences is down over 20%!). Keep the faith.
Liberty Global are down over 5% on the Dow and the whole market is plunging, so I do not think this has anything to do with a hiccup in the T/O of CWC it is just general market jitters
Now down 5% today. Is something amiss with the Liberty t/o offer? What is the last date we can sell before having to commit to accepting the offer?
Now down to 75p ish per share. Just reflects the exchange rate and the closing prices of LG and LILAC shares which have been hit lately along with the whole market. Could go up in the new year, but so far those who sold at 79p on the initial offer euphoria have done well.
Thanks Whitespirit. My account is with Stocktrade so hopefully they'll offer a solution. As an Irish resident I don't have access to the range of options UK stockholders do.
I hold my cwc with TD Direct in one of their simple accounts trading on FTSE 350 and spoke to them about my holding the Liberty shares. They told me that even though I can not trade US with that account I can hold the Liberty shares in it, after completing a paper W-8BEN, and then if I wish to sell at a later date they will trade them at their normal rate for that account by phone. Will not be able to trade online but because I'm not holding Liberty by choice (except for accepting the paper instead of selling now that is) they will not penalise me.
Thanks Grayling that was helpful. I nite your willingness to hold onto US paper, but think most of us will want to cash out. Let's hope a cheap broker comes along!
Liberty A are standard ordinary shares and will be listed on the DOW Liberty C will be non traded shares of a nominal value that can be exchanged for cash (or in certain circumstances exchanged for ordinary shares). The latter will probably not apply in this case, so cash. The tax implications are that you have to fill in a form which exempts you from US withholding tax on dividends at the full rate (it reduces from 15 down to 5% I think). Not that I would expect LG to be a big divi payer as Malone is allergic to dividends!
What's the difference between the two? Are they equally tradable? Does anyone know the tax implications of holding US paper?
Well Nomura put a price on CWC of 62p (up from 58p) on Dec 1st. This seems a little pointless as they are already bought out at around 80p a share by LG. I don't know why they are bothering, unless it just serves to underscore what a good buy this is between now and the TO cut off date, particularly if you can buy in on dips caused by falls in the overall market?
Don't know what happened, but these shot up almost 3% coincident with the US markets opening today having lain in the doldrums for the past week or so. This is despite the Nov 30th offer update indicating that the option 1 (recommended) return per CWC share had dropped back to 80.1p from 81.03 on the 23rd.
Thanks Comsman very interesting. I think I will stick this out and take the LG paper. Any cash (either upfront or in the form of redeemed C shares) can go elsewhere. I still have the Verizon paper from the Vod deal and that has done OK. I have also filled in whatever form it takes to get out of the withholding tax in the USA. I don't see LG as a good source of divi income as John Malone hates dividends, but he may push the LG share price up and that will do me fine.
There are predictions that suggest the dollar will rise significantly next year which could have a large affect on the value of the Liberty Global paper for those intending to go through with the offer. If as this article suggests one pound will only be worth $1.25 next year then I calculated the value of a single CWC share as being 96 pence. What to do??? http://www.nytimes.com/2015/11/21/business/dealbook/cable-wireless-looks-past-john-malones-complex-deal.html?_r=0
I agree and interesting analysis. CWC just put out an RNS giving the value of the three options to CWC shareholders. As this piece points out the CWC board recommendation (option 1) gives the highest immediate return to the CWC holder with a value per share if transacted today (23rd Nov) of 81.03p per share. I suppose this figure is bound to fluctuate with the LG share price and the exchange rate. For the moment I am holding. I got in in the low 60s so inclined to hold and take the full value of the TO at the time rather than bale out earlier.
As predicted a lot of UK based holders who have been in a long time are selling out as they do not want to hold US paper and have better things to do with their not inconsiderable profits. This may drift lower between now and the Q2 2016 completion date, but one thing is certain on that day CWC will be worth 86.82p a share, so don't worry if you need that extra little bit of profit, it will come. Myself I am not averse to holdings on the DOW as they are allowed within my ISA. I still have the Verizon shares given to me as part of the Vodafone deal and they pay a divi and have held up well. Malone is highly committed to capital growth for shareholders (rather than paying dividends) so you never know, holding LG paper could be a good ride for a while.
End of the line for Cable & Wireless Liberty deal sees sun set on one of Britain’s oldest companies http://www.ft.com/cms/s/0/5b9a967c-8d46-11e5-8be4-3506bf20cc2b.html
I have no idea where people are getting the idea that this is an all cash offer or that it represents a price of 86.82p PLUS a cash divi of 3p per share. The RNS clearly states: The CWC Directors intend unanimously to recommend that CWC Shareholders elect to receive the Recommended Offer. The CWC Directors do not intend to recommend either the First Dual Share Alternative or the Second Dual Share Alternative. Under the Recommended Offer, CWC Shareholders shall be entitled to receive, for each CWC Share: a number of New Liberty Global Class A Ordinary Shares as determined by the Exchange Ratio, such number not to be lower than 0.007921 and not to exceed 0.008301; and a number of New Liberty Global Class C Ordinary Shares as determined by the Exchange Ratio, such number not to be lower than 0.019391 and not to exceed 0.020321. CWC Shareholders who validly elect to receive the Recommended Offer and who are on the register of members of CWC at 6 p.m. (London time) on the Business Day immediately prior to the Effective Date will also be entitled to receive the Special Dividend. On the basis described above, the consideration under the Recommended Offer represents: an indicative value of 86.82 pence2 per CWC Share, INCLUDING the Special Dividend. So it is paper plus cash in the form of the dividend. The "C" shares may also be convertible to cash (a la Rolls Royce) but it is clearly NOT an all cash offer nor is it worth more than 86.82p per share.