Member Info for NigeCo

LarryBling...... "Nige, I think the shareprice is worth circa 390p but any bid will be in region of 250p."

Hi Larry, and thanks for your reply. I think that we are on the same page regarding a bid price, if indeed BT does receive one. Priced at 250p this would give a valuation of just under £39.4 Bln including Net Debt of £14.5 Bln. I would expect management to defend this attempt based on valuation. I personally don't see a bid above 300p, not without a bidding war. I would be happy with a bid between 250p & 300p. I also don't doubt that BT may well rise to 390p once FTTP and the expected cost cutting is completed, but we could be in for a long wait until 2026 - 2030. A bird in the hand and all that.

That's old news Mary. I haven't found anything new today, so without any new news Mulders post losses credibility. IMO.

Mulder, thanks. Do you the source of information? Link would be appreciated.

Nice one JAdams.

Just a reminder of what DT's CEO said earlier this year.

"Despite the lost billions, Höttges vowed he “will get that money back”, saying he had a “clear understanding” of options, including increasing the stake further in the hope that BT’s fortunes would improve or partnering with another big shareholder, without specifying what action they might take.

“I am not nervous, I will stay quiet, and do the portfolio transaction when I’m ready to do so. There will be a time when we will do a deal,” Höttges said, adding that BT is the “cheapest telco” and has a lot of potential to increase its value.

Franco-Israeli tycoon Patrick Drahi has built an 18 per cent stake in BT, although his ability to build the holding further is challenged by the UK’s new powers to scrutinise and limit foreign ownership of assets regarded as important to national security.

“Patrick Drahi is one of the smartest cats,” said Höttges, referring to the stakebuilding in BT. “He is sitting in front of the hole waiting for when the mouse is ready, to catch it.”

https://www.ft.com/content/86acc9f6-0468-4b30-b612-e52964236ac5

Just waiting on a big intraday spike in the BT share price on news that DT have increased their BT stake. Now that would surly move the undervalued share price.

S4 Capital trades on the FTSE All-share.

Hi Toff, while I very much doubt that our government would allow BT to be taken over, probably only about a 25% chance, and even a less chance if Labour was to gain power, so time is against any interested predator. I do keep coming back to Drahi and his ever increasing shareholding, now up to 24.5%. I don't believe that Drahi can afford to purchase BT, but I do think that he knows someone who can, Deutsche Telekom. Drahi hasn't invested billions in BT for the dividend, so he must be pretty sure of what he's doing, after all you don't become a billionaire by being stupid.

Https://www.youtube.com/watch?v=LXjr9GN6-w0

"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."

Fleccy, yes you're quite right, I did include lease liabilities (£5.760BLN) within Net Debt, my mistake. So stripping out lease liabilities the valuations do look a little more favorable. @300p £45,881BLN @400p £52,835BLN.

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

"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."

The price suggested above would value the bids including current Net Debt of £18.859BLN would be @300p £51.641BLN @400p £58.595BLN

Today's BT valuation £12.1BLN

"Barclays and another large investment bank have conducted recent research which values Openreach at about £26billion. That is far higher than the £18billion to £20billion price tag attributed to the division by analysts this spring.

But one senior telecoms source said: 'The reality is Openreach is worth double that. There's a bit of a goldrush for telecoms infrastructure assets in Europe. It is definitely undervalued and, if you look at the profit forecasts, it could easily be worth more than £40billion.'

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

What do other discussion board members think the valuation of any bid would be?

Considering that BT's Net Asset Value is 146p per share. We have Deutsche Telekom who if memory serves my correctly paid 440p per share and we have Drahi who's average purchase price is much lower at a guess of around 160p per share. I personally would hope for a bid towards 300p per share, but am I being too optimistic?

"Major shareholders Deutsche Telekom and French billionaire Patrick Drahi may well possess such a vision. But unfortunately for BT it could turn out to be the inspiration for a politically charged takeover approach. With Jansen halfway out the door, his successor may be about to receive the mother of all hospital passes."

With Jansen going anyway, I would think that he would welcome a takeover bid. Kerching.

JAdams, thanks for the update. Do you have the percentage number regarding the current S4 stock out on loan? Thanks in advance.

Larry........ "Nige, there small tremors appearing"

I hope that you're right mate, but I haven't read anything in that Telegraph article that I didn't already know. I hope to be proved wrong and the share price reacts up 20% today, but I won't hold my breath. However, I do agree that Drahi isn't here for the dividend.

There is nothing new in the Telegraph article regarding DT comments, so I'm expecting the market to disregard it.

24.5%

There's a reason behind Mr Drahi holding 25.5% of BT, I doubt that its for the dividend.

"Contrarian value investors may view this valuation as an opportunity, as it is too pessimistic, and may feel that all the risks are in the price. One such investor could be telecoms tycoon Patrick Drahi whose Altice UK has built a 24.5 per cent shareholding in BT.

He has said he has no intention of bidding for BT, and it is possible that he might not be able to do so given that it is an asset of national importance. The same reasoning would apply to Deutsche Telekom and its 12 per cent holding.

The problem with very cheap shares is that you can be waiting a long time for things to change. Given that a takeover is unlikely and that it will take some time for BT’s investments to pay off, it is possible that BT shares could stay cheap for a while yet."

https://www.investorschronicle.co.uk/education/2023/07/05/bt-is-undoubtedly-cheap-but-are-there-too-many-risks/