greatly appreciate updates, since i would have a difficult time catching, much less evaluating, the weight of these events. lowball bid is a puzzling strategy, but i guess it doesnt hurt XM either.
given the work you put in, i would be happy to also hear your other 'less humble opinions' on other names !
Thank you. As you can probably imagine, my focus on this has been pretty heavy for the last year or so, and I think it has filled an empty niche. I intend to write about other things in due time.
Tender is over. I hope they announce recommencement of buybacks next week and a deal on the towers imminently. If I understand correctly. it will be a win for shareholders who didn't sell into the tender and a win for Atlas as they satisfied the mandatory bid requirement and gained further ownership of TIGO whose stock will hopefully start rising from here.
In what way 24$ would make sense? It represents 4.6 times current EBITDA, quite low. And it does not include several items like deleveraging (maybe too long term) and transactions such as Lati. XN has 3 members in the Board and a strong influence. If Lati had no value, or too low value, XN would have stopped it. However he did not do it, so Lati will create value, obviously. The only questions are when (will it finally happen, as it is strongly delayed) and how much.
And then, for what higher price can XN make a final offer (for sure, 24$ is not is final and best offer)? If the offer is too low, he will not get the 100% he needs to go private, but he'll get a higher/full control. Is it that bad? He will not go out of the deal, but he will have to share the value. XN is a capitalist, and he wants to receive cash from his investments, so he will need to get a dividend distributed, which will contribute to increase the share price. Win win?
I can't rule that out. However, I think we are waiting for the other shoe to drop here, whatever that is. If it includes someone who would rather have cash getting Tigo shares in their lap, well, there might be no need to alter the bid level much. Of course, that would include the assumption that this bid is is fine with not getting all the shares.
Obviously the most mundane "other shoe" would be some clarity on Lati, which is likely necessary either way for a bid to go ahead. Depending on the value of that, plans for the proceeds and exactly how eager Niel is to buy a lot of shares, we can think of several permutations of bid price and acceptance level.
My main objective all along has been trying to caution people about selling out too cheaply. The speculation parts seem to interest people, but hopefully I'm delineating the guesswork well enough so that people don't get too carried away with it.
In this case, however, I feel like I'm on the less wild side about expectations for a premium than what I have seen floating around. We'll see soon enough.
greatly appreciate updates, since i would have a difficult time catching, much less evaluating, the weight of these events. lowball bid is a puzzling strategy, but i guess it doesnt hurt XM either.
given the work you put in, i would be happy to also hear your other 'less humble opinions' on other names !
Thank you. As you can probably imagine, my focus on this has been pretty heavy for the last year or so, and I think it has filled an empty niche. I intend to write about other things in due time.
Any thoughts on Lati as of now and How it is playing in to the valuation and potential future value creation?
Nothing new.
Tender is over. I hope they announce recommencement of buybacks next week and a deal on the towers imminently. If I understand correctly. it will be a win for shareholders who didn't sell into the tender and a win for Atlas as they satisfied the mandatory bid requirement and gained further ownership of TIGO whose stock will hopefully start rising from here.
some good macro news that indicates more customers should be able to upgrade and\or tolerate tigo pricing power :
'By region, remittance flows to Latin America and the Caribbean saw the highest increase...'
https://blogs.worldbank.org/en/peoplemove/remittances-slowed-in-2023---we-need-to-take-note
since my brokerage is probably the slowest, the $24 offer was officially received last week.
re-bid margin <5%.
In what way 24$ would make sense? It represents 4.6 times current EBITDA, quite low. And it does not include several items like deleveraging (maybe too long term) and transactions such as Lati. XN has 3 members in the Board and a strong influence. If Lati had no value, or too low value, XN would have stopped it. However he did not do it, so Lati will create value, obviously. The only questions are when (will it finally happen, as it is strongly delayed) and how much.
And then, for what higher price can XN make a final offer (for sure, 24$ is not is final and best offer)? If the offer is too low, he will not get the 100% he needs to go private, but he'll get a higher/full control. Is it that bad? He will not go out of the deal, but he will have to share the value. XN is a capitalist, and he wants to receive cash from his investments, so he will need to get a dividend distributed, which will contribute to increase the share price. Win win?
I can't rule that out. However, I think we are waiting for the other shoe to drop here, whatever that is. If it includes someone who would rather have cash getting Tigo shares in their lap, well, there might be no need to alter the bid level much. Of course, that would include the assumption that this bid is is fine with not getting all the shares.
Obviously the most mundane "other shoe" would be some clarity on Lati, which is likely necessary either way for a bid to go ahead. Depending on the value of that, plans for the proceeds and exactly how eager Niel is to buy a lot of shares, we can think of several permutations of bid price and acceptance level.
My main objective all along has been trying to caution people about selling out too cheaply. The speculation parts seem to interest people, but hopefully I'm delineating the guesswork well enough so that people don't get too carried away with it.
In this case, however, I feel like I'm on the less wild side about expectations for a premium than what I have seen floating around. We'll see soon enough.