Remember British Airways? They exist, don’t they? If you think IAG is British airways, then they do. However IAG is a Spanish company and Iberia is a Spanish Airline it runs, so you could easily say, BA is part of Iberia these days. It might be listed in London but a Spanish company is a Spanish company.
Its not surprising really. Remember trade deficits? They don’t talk about them anymore, even if the bottom line is a deficit means you are losing your relative wealth to those with a surplus. Decade after decade of trade deficit sees the UK hollowed out.
When was the last time a UK company took over a big or even a medium sized foreign company? The reverse is much easier to recall.
Altice has now bought up 24.5% of BT. Draghi is the billionaire behind Altice and as such this is not a corporate driven by a board but a personal vehicle for a deal maker.
They have said they do not wish to bid. OK, that makes ‘perfect’ sense, why not buy a minority of a unloved telco for billions and not take it over. As the youngsters say /sarc.
The exact words are “said it has restated its position to the board of BT that it doesn't plan to make an offer for the company and will be bound by that statement under U.K. takeover rules.”
This means they will not make a bid in the next 6 months. As such this statement means it wont bid for at least 6 months. This of course means it will bid sometime after 6 months IF…..
So the big IF is, will it be allowed to by the UK government who will consider BT strategic on a number of levels. It investigated this takeover when Altice hit 18% and didn’t do anything about it, so I would guess this process repeats as Altice grows its stake.
Then of course if you are a UK strip mining US company, you might like some one like Altice to build up a 25-30% stake to then buy for a fat premium as you swoop…. BT is half price compared to US telco!
So lets look at the chart.
I’ve ringed where I would guess it should end up on a bid.
Meanwhile BT is paying a 4.23% which is probably about the interest Altice is paying on the money it has borrowed to buy its BT holdings.
The lamentable thing about the UK stock market is that it can value the bulk of UK’s telco infrastructure at £14bn when it is generating £21bn in sales. However this is good news if you can buy in at this price and watch a predator pick up these cheap assets at a 30-50% premium. BT sold out at 200p or 220p? what a surprise that wont be. I give it about a year.
Income blog.
The idea income investment is one with a nice dividend and plenty of upside. For instant upside we go looking for value and the prospect of a take over funded by the ongoing profits of the target.
Well how about this!
Altice has now bought up 24.5% of BT. Draghi is the billionaire behind Altice and as such this is not a corporate driven by a board but a personal vehicle for a deal maker.
They have said they do not wish to bid. OK, that makes ‘perfect’ sense, why not buy a minority of a unloved telco for billions and not take it over. As the youngsters say /sarc.
The exact words are “said it has restated its position to the board of BT that it doesn't plan to make an offer for the company and will be bound by that statement under U.K. takeover rules.”
This means they will not make a bid in the next 6 months. As such this statement means it wont bid for at least 6 months. This of course means it will bid sometime after 6 months IF…..
So the big IF is, will it be allowed to by the UK government who will consider BT strategic on a number of levels. It investigated this takeover when Altice hit 18% and didn’t do anything about it, so I would guess this process repeats as Altice grows its stake.
Then of course if you are a UK strip mining US company, you might like someone like Altice to build up a 25-30% stake to then buy for a fat premium as you swoop…. BT is half price compared to US telco!
So lets look at the chart.
I’ve ringed where I would guess it should end up on a bid.
Meanwhile BT is paying a 4.23% which is probably about the interest Altice is paying on the money it has borrowed to buy its BT holdings.
The lamentable thing about the UK stock market is that it can value the bulk of UK’s telco infrastructure at £14bn when it is generating £21bn in sales. However this is good news if you can buy in at this price and watch a predator pick up these cheap assets at a 30-50% premium. BT sold out at 200p or 220p? what a surprise that won’t be. I give it about a year.
If the government demurs and say ‘no’ to a takeover then we will still be reaping a nice dividend, then at some point the inevitable will happen and someone who can get the thumbs up will come along and away will go BT to a foreign owner.
Forbes.
The hollowing out of UK PLC.
Remember trade deficits? They don’t talk about them anymore like they used to do, even if the bottom line is a deficit means you are losing your relative wealth to those with a surplus, you can still get richer if you run a trade deficit. Yet after decades of deficit the gap between a country like the UK and for that matter the US and the rest of the world narrows and ultimately the surplus countries end up richer and come calling to buy up your assets. After decade after decade of trade deficits, the UK is being hollowed out. If you want a good example of this hollowing, simply look at the prime real estate in London. It is owned by the overseas rich. Look abroad and you will not see such prime real estate owned by the British. How many UK companies get snapped up by overseas corporations. When was the last time a UK company took over a big or even a medium sized foreign company?
That’s economics for you. You simple cant have a trade deficit and not get relatively poorer.
We Brits can weep, but we can also make money while the country slips under the economic waves. The UK stock market is full of ridiculously low valued shares, begging to be owned by much high valued companies in the same business. US companies for instance can get a 100% uplift from the sales and profits of UK corporates. All they have to do is nip in and do the do.
A good example is BT, which is ‘bot being bought by Altice, all the while they have gone from a 11% holding, to 18% and now 24%.
Altice is the vehicle of Patrick Draghi a brilliant billionaire dealmaker.
Altice have again said, they do not wish to bid.
The exact words are “said it has restated its position to the board of BT that it doesn't plan to make an offer for the company and will be bound by that statement under U.K. takeover rules.”
This means they will not bid under the UK takeover rules which can be interpreted as they will not make a bid in the next 6 months. This of course can be cynically translated into Altice will bid sometime after 6 months IF…..
So the big IF is, if it will be allowed to bid by the UK government who will consider BT strategic on a number of levels and also politically charged on many levels too. The government investigated this situation when Altice hit 18% and didn’t do anything to say ‘stop,’ so I would guess this process repeats as Altice grows its stake, untill the timing is right to goggle up the whole enterprise.
Alternatively if you are a US company, you might like someone like Altice to build up a 25-30% stake to then buy for a fat premium as you swoop…. BT is half price compared to US telco so why not put together a transaction!
So lets look at the chart.
I’ve ringed where I would guess it should end up on a bid.
Meanwhile BT is paying a 4.23% dividend which is probably about the interest Altice is paying on the money if it has borrowed it to build a stake.
The lamentable thing about the UK stock market and why no new big company wants to list there, is that it can value the bulk of UK’s telco infrastructure with £21bn in sales at £14bn, where elsewhere you would get at least 1, not 0.6 and a massive tech might even get 10!
While this is bad news for the UK this is good news for the investor who can buy in at this price and watch a predator pick up these cheap assets at a 30-50% premium. BT sold out at 200p or 220p? what a surprise that won’t be. I give it about a year. As you can imagine I own a lot of BT.
If the government demurs and say ‘no’ to a takeover then we will still be reaping a nice dividend, then at some point the inevitable will happen and someone who can get the thumbs up will come along and away will go BT to a foreign owner or perhaps as a long shot the share and perhaps the whole FTSE will reprice.
Meanwhile trade deficits will grind on and the outcome is inevitable, as countries getting richer through trade buy up the assets of the countries paying away their assets as they get relatively poorer.