Member Info for fleccy

Gutter, why do you talk like an extra on Top Boy?

Many articles are stating that BT are ripe for a bid, just seen a Forbes article with BT topping the list in the takeover stakes. I'm not sure how the author comes to the conclusion that "Vodafone (LSE:VOD). Already effectively a takeover with Vod’s 50/50 merge with 3" is somehow interpreted as a pseudo takeover.

"I’d prefer to say here are five takeover possibilities:

BT (LSE:BT.). Altice will surely bid.

De La Rue (LSE:DLAR). Crystal Amber wants out and other security printers want in. Many new board members will be itching to do the deal.

Vodafone (LSE:VOD). Already effectively a takeover with Vod’s 50/50 merge with 3. Skates will be worn and repricing will kick off.

ITV (LSE:ITV). A snack for U.S. media or anyone looking for programming past and future. Only regulatory nostalgia would get in the way.

GSKGSK +0.8% ? Hell yes, if is it Haleon (LSE:HLN) Yes! Now all the highly valued stuff is away, all the patent medicines for coughs and wheezes can be sold to more highly valued purveyors of cough and wheezes companies in the U.S."

https://www.forbes.com/sites/investor/2023/07/11/london-on-the-back-foot/

I don't agree with the specific opinions in many of these articles, but I can see why speculation is rife. Prior to any increased holdings RNS's, it will likely show as sudden spikes in the Volumes, as per previous Altice purchases. The chart linked to below updates the following day with the previous days volume, so may give hints of any upcoming movements if the rumours have any merit.

https://docs.google.com/spreadsheets/d/e/2PACX-1vS4gJMsDAQq9sJ_zHqi_JnoVTryAdb4X64c7Clw12E2sGT3N6dTJfB60O8bc5Ns4burXvSSCVFrLvWC/pubchart?oid=2085752711&format=interactive

"Livestock. Respect but Bailey not know what he is talking about. What happen to the transitory inflation?"

Bailey doesn't write the report personally and although the stress test models are fictitious, they have a pretty good idea of contagion and stress effects on Bank balance sheets.

One of the justifications for allowing short selling, is that it increases volatility and it can be used to push down the value of even good companies where volatility is low. It does make me smile when short sellers get burned in a big squeeze though, like the recent Meme stock events and my personal favourite, the Porsche Volkswagen short squeeze.

https://internationalbanker.com/history-of-financial-crises/the-volkswagen-short-squeeze-2008/

What I don't like is the regulation preventing companies fighting back against the shorters, with companies pinned down while shorter's give them a good kicking, why should the shorter's be given any level of anonymity?

"I agree, BT is currently undervalued, cheap as chips. I would be delighted with anything close to 300p per share."

Me too, that would give us a profit of nearly £100,000 on our BT holdings; 400p would come in at nearly £185,000 profit.

Nige, BT is undervalued by any measure, so why wouldn't it be worth £3 to £4? Also your Net debt figure includes lease liabilities, which are an operating cost in the scheme of things.

I probably saw that article when it came out and subsequently forgot the figure since £40 Billion is an outlier on the high side, compared to the majority of figures I've seen. I also seem to remember seeing figures as low as £13 Billion, which I also mentally dismissed. For any entity looking at a takeover of BT, the valuation of the assets will be an important consideration, so I'd expect at least £3 and possibly as high as £4 a share offer for it to be given serious consideration.

"This has been brought down to allow a takeover first offer at a 45% premium ..175 that where Dragi started buying"

The BOD would have to support a low ball offer for it to succeed, look at Vodafone's takeover of Cable & Wireless Worldwide as an example of what I mean. For a bid to be taken seriously it would have to be at a level to pressure the Board to seriously consider it, and at a level for other shareholders to apply pressure on the Board to accept it. A 45% premium on the current price wouldn't come close in my opinion.

"Well EE cost £12bn and Openreaxh was valued as much as £40bn"

I haven't seen £40 Billion speculated for Openreach, I've seen up to £20 Billion. Openreach is just the workforce, BT separately own the ducts, poles, wayleaves and fibres that Openreach manage. BT also own the freeholds on a significant number of the exchanges sold to Telereal Trillium and leased back, so BT should get a payout when the sites come up for redevelopment as the exchanges become redundant.

Gary doesn't know. The FY24 Q1 update is due on the 24th July with the AGM the following day. Anything anyone states on here is simply speculation, the real facts will be communicated in a couple of weeks.

A takeover would be extremely unlikely in my opinion. BT has some fantastic assets in Openreach and EE, as well as the National Core Network, but it's been publicised that the Board are building takeover defence's, the Pension scheme has covenants complicating a takeover, and the Government would throw a hissy fit behind the scenes. Personally, if a bid did come out of the blue and pushed me into paper gain, I'd probably sell with the intention of buying back in if the bid fails, which is my view of the likely outcome.

"The Unions and Regulator would wear anyone down."

Indeed, It wasn't that long ago the Union were camping outside Jansen's South West property; I think targeting his residence was well out of order.

I think the straw that broke the camels back, was the regulator being all over him for his recent comments directed at the Altnets, which is somewhat rich considering the rhetoric directed at BT by the Altnets. The Altnets can say what they want, so why can't Jansen speak his mind without being hauled in front of the regulator, isn't BT supposed to be a private company? Jansen works for BT shareholders, he doesn't work for Ofcom, so why can't he speak his mind? Judging by todays share price movement the market's neutral on his departure, for what it's worth I think he's doing a good job.

https://www.facebook.com/TheCommunicationsUnion/videos/583694306604040/

Deutsche Telekom wouldn't be able to bid for Vodafone, as Vodafone's German business is far too large to get it past regulators.

Hilarious, two pieces of significant news released and the share price does nothing. Maybe the two cancel each other out.

CNBC just mentioned BT again, I don't think I've seen BT get this sort of coverage, they hardly get a mention on results days. I see Jansen going as a negative, but it isn't a problem as long as his replacement continues with the same strategy. He's probably had enough of dealing with Unions and regulators.

BT had some coverage on CNBC this morning, with Steve Sedgwick having a bit of rant about BT. He was talking off the cuff, saying how the various CEO's have failed to turn the company around but didn't go into any detail about anything; He went on to say that BT has a pension deficit of 10's of Billions of pounds, at which point I realised he hadn't done any research and didn't really know what he was talking about. The pension deficit was £3.1 Billion at the end of March, not 10's of Billions as stated on CNBC.

The only way I could see this substantially affecting the share price, is if it's backed up by an RNS stating that DT have increased their holdings. It smacks a bit of market games, first UBS say the dividend is under threat, with a hit to the share price, and now an article appears suggesting DT are looking a bidding for BT; It's like they're trying to wear down the retail holders, wouldn't surprise me to see the price drop tomorrow as part of the grinding down process.

They mention debt refinancing in the article and there is debt maturity in the coming years, with £1.501 Billion due in the next year. This is what BT say about current debt:

"Net debt and net financial debt

Net financial debt (which excludes lease liabilities) was £13.5bn at 31 March 2023, compared to £12.2bn at 31 March 2022.

The increase was mainly due to pension scheme contributions; normalised free cash flow was mostly offset by dividend payments and cash specifics.

Net debt (which includes lease liabilities) was £18.9bn at 31 March 2023, compared to £18.0bn at 31 March 2022. The difference to the movement in net financial debt reflects lease movements.

At 31 March 2023 the group held cash and current investment balances of £3.9bn. The current portion of loans and other borrowings is £1.8bn.

Our £2.1bn revolving credit facility, which matures in March 2027, remains undrawn at 31 March 2023.

We remain committed to our credit rating target of BBB+ and minimum rating of BBB. During FY23, all of the major agencies confirmed their ratings at BBB or equivalent."

I'm assuming BT's accountants have the less than 1 year debt maturity covered, and it's likely they've planned for the debt maturing between 1 and 3 years which stands at £3.708 Billion. I'm not an accountant, so I have no idea if BT will have to take on more debt, but it's likely they'll get good terms on new bonds if they do, and may be ok to ride it out if interest rates come down as fast as some predict. It looks as though BT have a total of £5.209 Billion maturing over the next 4 years; I would hope they'll balance capex responsibilities against free cash flow and existing credit facilities/cash/investments to efficiently cover debt maturity as it comes due.

Are cheap because most of the cash is being invested in just 7 stocks.

https://www.youtube.com/watch?v=0s80FF0pnVo

It doesn't name them in the Video, but I'm talking Microsoft, Nvidia, Apple, Amazon, Meta, Google and Tesla; Clearly this situation can't go on forever.

Doesn't the link wording tell you everything you need to know about the authors motives? Appearing on search engines as "Philip Jansen 'desperate' to hang up on ailing BT"; I'd suggest headlines like this are part of a concerted campaign to damage potential retail investor sentiment. The definition of "ailing" is "in poor health" and although the share price is down, BT is making good profits and is actually in very good health, so the authors wording is misleading; I'll just add this journalist to the list of vested interest commentators on my ignore list.

I'd say the rhetoric, aimed at damaging UK retail investor sentiment, is ramping up; Is this a sign that UK and particularly Telecom stocks are about to go higher, who knows?