Member Info for NigeCo

Who's buying? Mr. Drahi maybe?

Nothing came of the speculation in July that Drahi intended to increase his shareholding further to 29.9% from 24.5%.

https://totaltele.com/drahi-mulls-increasing-bt-stake-to-29-9/

No reported trades in S4 since 15:18pm.

1pencil, wise words mate. Recessions don't last forever, if indeed we do have one. The sell off in S4 is way over done IMHO.

Two elections next year, UK & USA that should help S4.

In H1 2023 S4 Capital reported Net Debt of £109.4m vs. £135.5m prior year 2022. So S4 managed to reduce Net Debt by £26.1m whilst continuing to pay cash payments for past M&A. So S4 have shown that they can reduce Net Debt. Once all past M&A cash payments are paid for in this financial year, S4 will then be in a position to pay down its Net Debt. In the words of SMS Net Debt is expected to fall considerably in 2024.

Further to add, the latest analysts forecasts are currently for Net Debt to fall to £144m in 2024 from £201m in 2023, and in a Net Cash position of £15.4m in 2025. Time will tell.

Net Debt is expected to peak this financial year after all past M&A is fully paid for with FCF forecast to be over £100m and Net Debt set to fall considerably in 2024 hence.....

"Inaugural dividend of at least 1 pence per share, depending on 2023 outturn, reflecting Board’s confidence in our strategy"

https://www.s4capital.com/data/production/2023-09/H1%202023%20Presentation%20Website.pdf?VersionId=ibznNKM.gTUZdg7aZxm9ri83f20GI0fD

"UBS cuts BT Group price target to 115 (120) pence - 'sell'"

I would like UBS to justify their 115p BT valuation. Just based on the valuation of openreach alone is worth in the region of £22BLN to £40BLN dependent on who you listen to.

"investors Brookfield and Macquarie – had run fresh analyses on the value of Openreach that could price the cables division at an eye-watering £40billion."

https://www.thisismoney.co.uk/money/markets/article-10248943/Private-equity-firms-send-value-BT-cable-arm-40BN.html

"What's overlooked and easily forgotten is the FCA merging of indexes, once S4 is part of the FTSE indexes we should see much more UK institutional participation."

Yes, agreed mate. Not to mention, if or when S4 Capital start paying dividends this may well open up further interest from funds that can only invest in dividend paying companies.

Interesting to see according to Bloomberg that the two institutions that purchase over 5% each last month, Patient Capital Management and The Capital Group Companies, Inc. Both are new positions.

Morningstar reports that Barons had sold out of S4, Fintel is a little delayed but accurate, it reports (see my earlier post) that Barons had sold out of one fund, but increased its S4 holdings in another fund. Fintel was on the money compared to Morningstar.

Barons current S4 Capital shareholding according to Bloomberg stands at 3,192,974

Fintel is the best free website to follow, NOT Morningstar which IMO is poor.

I enclose an up to date Bloomberg account of all current S4 Capital shareholders, courtesy of RakersTheDon a poster on ADVFN.

https://postimg.cc/hQ0m7835

We could benefit from poster JAdams5000 input, regarding an up to date institutions holding in S4 Capital, he subscribes to Bloomberg. Not sure if JAdams5000 still holds S4, he did in the summer.

Volume picking up, currently 1.1M.

Jacob buys more S4 Capital.

https://www.youtube.com/watch?v=kxMYBB3LnPU

It looks like one Baron fund closes its S4 Capital position selling 8,754 shares, while another Baron growth fund increases its S4 holding by 80.48% to 2,471,319 shares.

Baron Technology Fund R6 Shares filed a NPORT-P form disclosing ownership of 0 shares of S4 Capital PLC (GB:SFOR) valued at $0 USD as of June 30, 2023. The entity filed a previous NPORT-P on May 25, 2023 disclosing 8,754 shares

-----------------------------------------------------------------------------------------------

On August 28, 2023 - BIGFX - Baron International Growth Fund filed a NPORT-P form disclosing ownership of 2,471,319 shares of S4 Capital PLC (GB:SFOR) valued at $311,386,194 USD as of June 30, 2023. The entity filed a previous NPORT-P on May 25, 2023 disclosing 1,369,337 shares of S4 Capital PLC. This represents a change in shares of 80.48% during the quarter. The current value of the position is $143,830,766 USD.

1pencil......"US institutional holdings are at an all time high, add in the 10% or so from last two TR1's"

1pencil, thanks for posting the link mate.

Going by the graph (link below) it clearly shows that the lower the S4 share price falls the stronger the institutional investors acquire S4 shares. This doesn't explain the constant share price falls. I can only assume that most of the institution trades are O/B off-book trades, hence the reason why the share price hasn't reacted.

https://fintel.io/so/gb/sfor

Just to put things in to perspective regarding institutional owners as of 30th September........

Sold shares................ 56,728,598

Purchased shares...... 42,509,440

Templeton Global Advisors Limited increased their holding by almost 26 million shares.

https://www.morningstar.com/stocks/xlon/sfor/ownership

BT/Drahi: financially feasible does not mean politically advisable

The French telecoms tycoon’s motives remain as opaque as ever

It is good to talk, BT Group told customers in an old marketing campaign. One thing most UK politicians prefer not to discuss is a takeover of the national telecoms champion. They would almost certainly oppose this.

M&A chatter persists nevertheless. This is because Patrick Drahi has amassed an equity exposure of 24.5 per cent. He has agreed he will attempt no full offer for BT before November 24.

Lex has assumed the highly leveraged French telecoms tycoon could not afford BT anyway. The business has an enterprise value of £26bn today, before leases. But James Ratzer of New Street Research is challenging that notion.

Assume Drahi offered £1.70 per share, his first cost price. That would mean paying £12.5bn for the BT shares he does not control, a 43 per cent premium to the three-month average. Drahi could cover 40 per cent of this price with debt backed by BT’s dividend stream, and 60 per cent equity from Drahi’s holding company.

Ratzer assumes that BT would raise additional debt under Drahi’s ownership. This first tranche could amount to £9.8bn. That would repay the holding company’s outlay of £7.5bn leaving £2.3bn to wipe out other debts within Drahi’s empire.

He would need to appease BT’s pension trustees. They would worry that if BT struggles financially, a solvency deficit of at least £11.6bn would not be covered. That could require a large upfront payment of about £6.5bn plus annual payments of £300mn.

Overall, BT’s net debts would soar to nearly £31bn. The multiple of ebitdal (which excludes leases) would rise to 4.3 times. Change of control clauses would trigger bond refinancings, increasing costs.

Drahi could reduce debts by selling broadband infrastructure group Openreach, valued at about £23bn. But disentangling it from BT would be tricky.

The upshot, for Lex, is that the purchase might be financially feasible, by structuring it as a leveraged buyout. However, this would only increase political resistance. Cries of “asset stripping” would echo around the City and Westminster. Drahi’s motives therefore remain as opaque as ever.

https://www.ft.com/content/2e8968ee-6b71-4dfa-a375-a83581617dc3

"Maybe I must just keep the faith in SMS and the company..."

The way that I look at it is this..... I invested in the management, SMS has a very good track record. I will be adding not selling.

I would say if you believe in the management hold, if you don't, sell up and move on.

Have a good weekend chaps.

If you have watched the AGM you will see Sir Martins reply to a shareholder regarding the low share price.

Shareholder Question... The share price is very low, is there anything that you can do to try and help increase the share price?

SMS Reply.... Look, a good business will always win through, if its a good business, and we think that we have a good business, then the results will reflect that.

1pencil, good post mate. Let's hope that this is the end to the selling, because the baby really has been thrown out with the bath water here with S4.