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Does anyone know how the expected switch-off of terrestrial TV and Radio is going to affect Arqiva ?
Presumably all of their TV transmitters and infrastructure will not be needed after the switch-off ?
So will the switch-off not be a huge negative for Arqiva future revenue and profits and business model ?
Is there going to be any need for these TV transmitters and infrastructure in the future ?
https://www.telegraph.co.uk/business/2022/12/07/bbc-must-ready-end-terrestrial-tv-broadcasts-decade-says-tim/
I think a large amount of revenue comes from Smart Meters these days.
Happy with the value on offer here.
I keep doing the most miserable calculations on assets held and the worst I can get is £300m. Even with £30m in selling fees that's £270m, £50m north from here (near 20%). I'm going to keep loading here.
Are you including future liabilities in your calcs, such as unpaid tax on asset disposals? and management bonuses etc?
£30m in costs, that's insane, and enough. They must have tax losses coming out of their ears.
I've written off more than a £400m from their valuations too.
Elio - £40m (£55m Liberum worst case book)
Aqua comms - £175m (£227m Liberum worst case book)
Aquiva - £50m (£69m Liberum worst case book)
Cash - £75m (£108m Liberum worst case book)
rest of portfolio £5m
RCF - £35m
Total = £310m (then minus £30m is disposal costs, which is eye wateringly high).
£280m (more than 20% from the price today or 32p) - not going to attract rainbow chasers but that's solid.
The additional risk here … is the fund winding down, and those still holding from the IPO, litigating management that seems a can of worms going forwards. There are assets here, the investment case has presumably not gone away, so as others note, assets were possibly bought at elevated prices, to be sold perhaps at discounted prices, that seems bizarre.
How would pulling the dividend for a year and replacing the management team, or passing the fund itself to another asset managing team fare in terms of maximising shareholder value.
As it stands, simply stating “maximising shareholder value” going forwards is pretty meaningless given the destruction if shareholder value this past year.
Options need to be laid out clearly, in the update for shareholders to make an informed decision, but I’m not hopeful. That said, my average here is about 27p … so not sitting on huge losses with a possibility of good upsides.
I have been around long enough to know that not all deals are done transparently. It's staggering that they spent £1.4bn and have about £300m in assets. I mean, Jesus. Barely any column inches about it either.
I'm also comforted that a bigger/angrier shareholder has called the shots since before Xmas and am relieved it's being wound down.
Avg is 26.2p - so I'm not going to lose sleep. I can't see how it gets much lower, unless Verne sale derails but no mention of adversity there.
No doubt, this is utterly terrible, but it's about timing for me.
Also worth pointing out, I'm absolutely not factoring in any earn-out from Verne, I haven't allowed any enterprise value for red sea cable (Aqua Comms), or the fact that Arqiva is growing/showing sizeable EBITDA.
I've priced everything below book, believing a fire sale situ. You'd be taking the pi££ to value anything lower.
ARQIVA LIMITED
Company number 02487597
Results on Company House .... Operating Profit nearly doubled 2022/2023 .... all very Bizarre.
It’s really strong, isn’t it, and I’m booking it in at £50m, despite buying the stake for £400m+
Now valued just above £200m for everything we have (minus Verne). Nuts. Screw broker concerns, it’s too low. I recall brokers crying about Rolls Royce at 70p before it went to 300p.
Broker recommendations exist to promote trade or facilitate the "market" .... the broker values IMO are rather meaningless but the direction of Broker recommendations meaningful in the sense that they give a picture to background positions of the brokers.
Indeed.
I do wonder if we'll see a bid here to snatch the assets at a snip. Currently, you can get everything for £200m and just block/stop the Verne deal, if you have deep enough pockets/see the value.
It's certainly into crazy valuation area.
Quite … the same scenario was true of Seplat over the Exxon mobile deal that the privatised state company blocked wanting the Exxon assets for themselves they could have bought Seplat out for less than the Exxon mobile price tag.
If only a bank would lend me £200 million ….. ;)
£3.1bn net assets in Arqiva and we own 48% (but owe £170m in VLN). Entire company valued at £200m. Nah.
Reckon I could raise £100m, 50/50 OK? ;)
I might get the £100 m on leverage from CMC .... ;)
I can maybe get 100k at a push, can I have 0.1%?
Excellent :D
There is a call on Friday, hopefully it will shed some light on proceedings and calm a few people down.
Does anyone have an idea of how much the following will be ballpark?
Once the RCF has been repaid, the Board will review the potential allocation of any remaining proceeds between the repayment of the indebtedness to the vendor in respect of the Company's acquisition of its interest in Arqiva in October 2022 and distribution to shareholders.
Wait for the share to go into auction on the downside .. as the likely clue for the day's low. Hedge funds are crawling all around this share IMO.
It's bonkers. My valuation is 30% lower than the worst case and still £70m higher than today.
It is what it is .. value has no meaning when the hedgies are at play - they want people to fold at a loss. 24p buy cleared at 25.2 late in the after noon ... next buy 23.8p keeping shares to get average down.
GLA.