Tigo Colombia and Movistar (Telefonica) just signed an MOU around network sharing, meaning they will pool their infrastructure assets in what sounds like a JV structure. This will ease the cost burden around capex and spectrum purchases and could in the future conceivably allow a multiple arbitrage, since pure-play infra assets are considerably more sought after.
While not a full merger, this looks like it could be a game changer for the tough Colombian market, if approved.
Xavier won’t start buying until June 30th. Believe that could put significant downward pressure on the stock.
Found this last night:
“Commencement Date” means the Trading Day immediately following the date which is 30 calendar days following the date hereof.
“Purchase Period” means the period from, and including, the Commencement Date to, and including, the Completion Date.
Seems common to have a cooling period like that:
Companies may want to require a period of time to separate the establishment of a Rule 10b5-1 plan and the execution of trades pursuant to the plan. Although the absence of possession of MNPI at the time of plan adoption is the threshold question, rapid transaction executions subsequent to plan adoption may create an appearance of impropriety and call into question whether a plan adopter had MNPI at the time of plan adoption. Brokers administering plans frequently impose a seasoning period as part of their own trading practices, but companies also adopt these policies. A fourteen day period is often used, but many companies have increased the waiting period to about one month.
I was reading around a bit about these rules when the filing first hit and I think the rules aren't as stringent for Xavier since he isn't an employee or a director. From what I could gather, there is no need for him to adhere to a cooling off period like that. He likely isn't in possession of any MNPI since he didn't have any board representation before the adoption of the rule 10b5-1.
For individuals there is a mandatory cooling off period that was adopted recently, but the purchases here are done via a company, so I don't think that applies.
But those first two things I list, the commencement date and the purchase period. Those are in his purchase mandate. They clearly state that the mandate’s purchase period starts the first trading day 30 days after May 31st. Do you mean that they’re just there, and don’t apply? Cause they’re in the beginning of the mandate, under the definitions.
Well, like I have said earlier, I'm not here to predict price one or two weeks out. Besides, he's already been gone since May 26 at this point. With bid being a major part of the thesis, I don't feel like dancing in and out to possibly save a few percent is rational for me.
So your main theory is still that he'll sooner than later bid for the entire thing? Considering the way in which he has explicitly said in other companies, where he owns similarly large stakes, that he doesn't plan to bid for the entire company. That hasn't happened here. But I don't really see why he would have to hurry just yet. Could still give it a bit of time, maybe even postpone the sale of the tower co until he's ready to bid for the entire company. Could it also be so that the board won't take a stand on a takeover bid until the new board is in place? So that after tomorrow the Apollo thing might dissipate, and either XN moves in, or he doesn't.
Board composition might be relevant, yes. Nobody can reliably predict the future in minute detail. All I'm saying is the incentives haven't changed and if the Colombia situation plays out roughly the way it seems to me, there is even more incentive.
There could conceivably be countermoves by the new owner to suppress values, but remember: he doesn't yet control the board even after today. To take over completely he needs more shares.
But short-term, with risk of there being no more over market buys from XN, the risk must outweigh the possibility of bid or rise in share price? Can't really see any catalysts in the near-term, outside of a possible bid, or something about the tower co. Also seems to be very few buyers out there, except him of course. Find it hard to see the stock price stabilising above 160 if there's no news or development during the summer months, and no buys from XN.
If there are fewer buyers out there it means the upside scenario is less priced in. The market could be right on that or it could be wrong, and it's up to you to make that determination. There is always downside risk. An asymmetric situation with absolutely no downside risk is a unicorn. I see no really good reason why there won't be any movement at all for several months, but you may think differently and that's fine. That's what makes a market.
As for if the stock can go to 160, I have no clue, it could go there tomorrow for all I know. The game I'm playing is not trying to get in front of day to day movements in stock price, though, because I think that's by and large not a winnable game, at least not for me. I try to spot changes in the fundamental setup before others, but price movements due to who is trading when, not so much.
Must say I think the upside scenario was more than priced in at 200. Perhaps it's more attractive at 177. But the negatives in the near term seem to far outweigh the positives. Especially considering the other things one could have put one's money in the past months. Last time XN went a long time without buying, the stock hit 173. Sure, on a disastrous Q1, but still. Highly doubt that even a completed sale of the tower co could withstand the effect of losing the only thing that has been keeping the price up these months.
What could one hope for in the coming months? I also have a hard time seeing that XN could return to buying shares without the "takeover talks" with Apollo ending, which in turn would make the shares drop to 150 again probably. Tower co, sure, but isn't that priced in here? We're in XN's violence, and should he wait and see for a while, I don't see how the stock price could do anything other than drop.
So all hope right now is a quick clean bid from him around 230, which I believe is more than fair, considering the rest of the market's sentiment towards Millicom.
It's certainly been a superior strategy thus far to have a rather conservative view of the price an acquirer is willing to pay and trade around that. I guess we will have to wait and see if that holds going forward.
My idea in opposition has of course been that the multiple differences between different share price levels are negligible, so the really important part is getting the odds of value realization correctly. Still a second half to play, but I'm behind right now.
The proposals to Millicom’s EGM, which included increasing the authorized share capital of Millicom and authorizing the Board of Directors to issue new shares within the limits of the authorized capital, with the ability to remove or limit the preferential subscription right of the shareholders up to a maximum of new shares representing 10% of the company’s outstanding share capital, did not achieve the 2/3 vote required for adoption. Accordingly, Millicom’s articles of association were not amended to introduce these changes.
I don’t think more than 40% of the voting power have been present at an AGM or EGM since Kinnevik stepped out, so in effect I would think he controls the AGM/EGM even if he doesn’t fully control the board/company without a higher stake.
Agreed! IF a plan exists of bringing Illiad to the market through the backdoor, the first step will probably go through today with the proposal of print new stocks, though..
Seems more like a way to be prepared in order to eventually be able to buy out a minority again, if the opportunity presents itself. And there is only one minority of relevant size. A reverse merger type of deal would have Millicom owners way more diluted.
That depends on how aggresve XN will be in the coming timeframe before such a deal. If his stake (or other vehicle under his control) has a majority of outstanding stocks in MC before such approach, the markets valuation of the new entity is a more interesting question than dilution.
Believe that was it. We were all wrong. No clear catalysts in the near term. Fantastic story though. This will most likely take at least a year to play out, and there are a lot of other things out there in the meantime.
Seems like Xavier’s mandate is capped at around 60 thou shares a day. Didn’t buy more than that last Thursday, even though there was some volume. That won’t be enough to support a bounce or stop a sharp decline in price.
He’ll be done by early next year. No need to hurry.
Believe we all got a bit to captivated by the sit and lost our composure.
We don't know how much he bought on Thursday, but he increased his holding 245k from the filing on the 24th to the filing from Friday (which indicated his holding per an unknown time on Thursday the 27th). There was thin trading on Tuesday and Wednesday, so it seems more likely that he bought more on Thursday.
Anyhow, even if we only average the three days we get above the levels from earlier in the program. I don't think he bought more than earlier on the first two days, so this makes sense if the program targets a percentage of daily volume (something like 40, 40, 165 would approximate about 20% of daily volume, like earlier). This would also be a more rational way to structure it than as a set amount every day.
There’s absolutely no way that you’ll end up being correct about this in the end. If anything you just succeeded in fooling some Twitter folks into this.
It’s obvious the company isn’t working currently, it’s barely self sufficient. A lot, a lot has to change. If you’re Xavier, are you really bidding now? Why? Risk of someone taking a corner is very small. Company will most likely take a beating coming quarters as well. Arguing that it’s worth 40$ is silly.
He’ll wait, if he ever takes it private that is. We’ve all been fooled by Ramos. There’s no way this company gets taken over for more than 21$. We should all be very happy at those levels. Hopefully a lot of big owners have changed their mind after these last two quarters.
I’ve carefully and silently read all of your related posts since February. All I can say you are the king of speculation and I respectfully recommend you should transition your career into writing science fiction novels.
Just finished reading all your pieces on this amazing story. Must say I'm quite convinced and will put some money towards some calls. 25$ seems like a bargain for the company. Stock has taken some flak lately though. Any thoughts as to why, except the aborted takeover talks? Is market not believing in an eventual bid from Xavier or Iliad? The best thing to happen going forward would be an activist fund taking a large position and putting some pressure on him to do something.
If you would have to guess on a bid level that would go through, what would that be? Any particular time frame you see?
When Iliad bought Play they announced in September. Xavier took Iliad private at the end of July 2021.
I'm not sure if the market ever priced a takeover by Xavier Niel. First the bid talks released to FT moved the stock. Then Niel moved the stock with his over the market purchases. Now he's been absent since end of May and no real signs of interest from anybody else while talks officially cancelled.
The existing institutional owners have by and large stayed put and further down the shareholder list there has been some movement, such as Gabelli increasing his holding. But my hunch is that if more of a pure activist of size was to show an interest it would probably have already happened by now. It's also not that easy to build a large position without pushing the price, especially not during the periods when Niel has monopolized the trading. The stock has become markedly less liquid this year, indicating a clear effect from Niel's purchases.
As for exact timelines, I have deliberately avoided making such estimates. There are some relevant dates out there -- the end of Niel's automatic purchase plan and the release of the Q2 report, a month from now. There's also the Lati separation which is slated for before end of Q4.
But the truth is nobody outside of Niel's circle can know the end game schedule, and possibly they don't know yet either. An issue that works in favor of Niel is that hardly anything except actual real money coming out of the company seems to move the price of a telco stock these days. Patience is likely needed and that's in short supply in the general market currently and especially also among tested Millicom shareholders. And professional arbitrageurs don't make bets without numbers or a set timeline attached.
Where to begin... It’s a bastard-stock in many aspects, despite the underlying company,s operations been steadily improving as guided by management. A latam operation, registered in Luxemburg and largely traded in Sweden, where the elite is afraid to speak out in favour as a result to numerous disapointments regarding stock-prize. Huge no of private citizens owns the stock and they seem to be silent (sleeping) /clueless owners through various savingsaccounts who where given the stock pro rata when Kinnevik made it’s exit.
Now everybody is in stasis, awaiting XN,s proxy to start buying on the mandate outlined in a recent SEC-filing. (Allowing XN to purchase 8.500.000 stocks despite him being an insider. ) The mandate starts July 3 at the very latest.
Nothing of what has been outlined here, has changed?! No one in their right mind could have thought that the final play will come from any other than XN.
Tigo Colombia and Movistar (Telefonica) just signed an MOU around network sharing, meaning they will pool their infrastructure assets in what sounds like a JV structure. This will ease the cost burden around capex and spectrum purchases and could in the future conceivably allow a multiple arbitrage, since pure-play infra assets are considerably more sought after.
While not a full merger, this looks like it could be a game changer for the tough Colombian market, if approved.
https://comunicacionestigo.com/prensa/?p=578
The situation with EPM does probably relate, and I'm sure the near future can clear up exactly how.
Since I’m not on Twitter I’ll write you here.
Xavier won’t start buying until June 30th. Believe that could put significant downward pressure on the stock.
Found this last night:
“Commencement Date” means the Trading Day immediately following the date which is 30 calendar days following the date hereof.
“Purchase Period” means the period from, and including, the Commencement Date to, and including, the Completion Date.
Seems common to have a cooling period like that:
Companies may want to require a period of time to separate the establishment of a Rule 10b5-1 plan and the execution of trades pursuant to the plan. Although the absence of possession of MNPI at the time of plan adoption is the threshold question, rapid transaction executions subsequent to plan adoption may create an appearance of impropriety and call into question whether a plan adopter had MNPI at the time of plan adoption. Brokers administering plans frequently impose a seasoning period as part of their own trading practices, but companies also adopt these policies. A fourteen day period is often used, but many companies have increased the waiting period to about one month.
I was reading around a bit about these rules when the filing first hit and I think the rules aren't as stringent for Xavier since he isn't an employee or a director. From what I could gather, there is no need for him to adhere to a cooling off period like that. He likely isn't in possession of any MNPI since he didn't have any board representation before the adoption of the rule 10b5-1.
For individuals there is a mandatory cooling off period that was adopted recently, but the purchases here are done via a company, so I don't think that applies.
But those first two things I list, the commencement date and the purchase period. Those are in his purchase mandate. They clearly state that the mandate’s purchase period starts the first trading day 30 days after May 31st. Do you mean that they’re just there, and don’t apply? Cause they’re in the beginning of the mandate, under the definitions.
You're right, it's hard to interpret it any other way.
That could be a bad one? Thinking of selling and coming back end of June.
Well, like I have said earlier, I'm not here to predict price one or two weeks out. Besides, he's already been gone since May 26 at this point. With bid being a major part of the thesis, I don't feel like dancing in and out to possibly save a few percent is rational for me.
So your main theory is still that he'll sooner than later bid for the entire thing? Considering the way in which he has explicitly said in other companies, where he owns similarly large stakes, that he doesn't plan to bid for the entire company. That hasn't happened here. But I don't really see why he would have to hurry just yet. Could still give it a bit of time, maybe even postpone the sale of the tower co until he's ready to bid for the entire company. Could it also be so that the board won't take a stand on a takeover bid until the new board is in place? So that after tomorrow the Apollo thing might dissipate, and either XN moves in, or he doesn't.
Board composition might be relevant, yes. Nobody can reliably predict the future in minute detail. All I'm saying is the incentives haven't changed and if the Colombia situation plays out roughly the way it seems to me, there is even more incentive.
There could conceivably be countermoves by the new owner to suppress values, but remember: he doesn't yet control the board even after today. To take over completely he needs more shares.
But short-term, with risk of there being no more over market buys from XN, the risk must outweigh the possibility of bid or rise in share price? Can't really see any catalysts in the near-term, outside of a possible bid, or something about the tower co. Also seems to be very few buyers out there, except him of course. Find it hard to see the stock price stabilising above 160 if there's no news or development during the summer months, and no buys from XN.
If there are fewer buyers out there it means the upside scenario is less priced in. The market could be right on that or it could be wrong, and it's up to you to make that determination. There is always downside risk. An asymmetric situation with absolutely no downside risk is a unicorn. I see no really good reason why there won't be any movement at all for several months, but you may think differently and that's fine. That's what makes a market.
As for if the stock can go to 160, I have no clue, it could go there tomorrow for all I know. The game I'm playing is not trying to get in front of day to day movements in stock price, though, because I think that's by and large not a winnable game, at least not for me. I try to spot changes in the fundamental setup before others, but price movements due to who is trading when, not so much.
Must say I think the upside scenario was more than priced in at 200. Perhaps it's more attractive at 177. But the negatives in the near term seem to far outweigh the positives. Especially considering the other things one could have put one's money in the past months. Last time XN went a long time without buying, the stock hit 173. Sure, on a disastrous Q1, but still. Highly doubt that even a completed sale of the tower co could withstand the effect of losing the only thing that has been keeping the price up these months.
What could one hope for in the coming months? I also have a hard time seeing that XN could return to buying shares without the "takeover talks" with Apollo ending, which in turn would make the shares drop to 150 again probably. Tower co, sure, but isn't that priced in here? We're in XN's violence, and should he wait and see for a while, I don't see how the stock price could do anything other than drop.
So all hope right now is a quick clean bid from him around 230, which I believe is more than fair, considering the rest of the market's sentiment towards Millicom.
It's certainly been a superior strategy thus far to have a rather conservative view of the price an acquirer is willing to pay and trade around that. I guess we will have to wait and see if that holds going forward.
My idea in opposition has of course been that the multiple differences between different share price levels are negligible, so the really important part is getting the odds of value realization correctly. Still a second half to play, but I'm behind right now.
You're quickly becoming the TigoGPT.
Any thoughts on this?
The proposals to Millicom’s EGM, which included increasing the authorized share capital of Millicom and authorizing the Board of Directors to issue new shares within the limits of the authorized capital, with the ability to remove or limit the preferential subscription right of the shareholders up to a maximum of new shares representing 10% of the company’s outstanding share capital, did not achieve the 2/3 vote required for adoption. Accordingly, Millicom’s articles of association were not amended to introduce these changes.
I don’t think more than 40% of the voting power have been present at an AGM or EGM since Kinnevik stepped out, so in effect I would think he controls the AGM/EGM even if he doesn’t fully control the board/company without a higher stake.
The board is what is relevant to say postpone tower sales, not the AGM. He won't have majority of the board.
Agreed! IF a plan exists of bringing Illiad to the market through the backdoor, the first step will probably go through today with the proposal of print new stocks, though..
Seems more like a way to be prepared in order to eventually be able to buy out a minority again, if the opportunity presents itself. And there is only one minority of relevant size. A reverse merger type of deal would have Millicom owners way more diluted.
That depends on how aggresve XN will be in the coming timeframe before such a deal. If his stake (or other vehicle under his control) has a majority of outstanding stocks in MC before such approach, the markets valuation of the new entity is a more interesting question than dilution.
Believe that was it. We were all wrong. No clear catalysts in the near term. Fantastic story though. This will most likely take at least a year to play out, and there are a lot of other things out there in the meantime.
Seems like Xavier’s mandate is capped at around 60 thou shares a day. Didn’t buy more than that last Thursday, even though there was some volume. That won’t be enough to support a bounce or stop a sharp decline in price.
He’ll be done by early next year. No need to hurry.
Believe we all got a bit to captivated by the sit and lost our composure.
We don't know how much he bought on Thursday, but he increased his holding 245k from the filing on the 24th to the filing from Friday (which indicated his holding per an unknown time on Thursday the 27th). There was thin trading on Tuesday and Wednesday, so it seems more likely that he bought more on Thursday.
Anyhow, even if we only average the three days we get above the levels from earlier in the program. I don't think he bought more than earlier on the first two days, so this makes sense if the program targets a percentage of daily volume (something like 40, 40, 165 would approximate about 20% of daily volume, like earlier). This would also be a more rational way to structure it than as a set amount every day.
There’s absolutely no way that you’ll end up being correct about this in the end. If anything you just succeeded in fooling some Twitter folks into this.
It’s obvious the company isn’t working currently, it’s barely self sufficient. A lot, a lot has to change. If you’re Xavier, are you really bidding now? Why? Risk of someone taking a corner is very small. Company will most likely take a beating coming quarters as well. Arguing that it’s worth 40$ is silly.
He’ll wait, if he ever takes it private that is. We’ve all been fooled by Ramos. There’s no way this company gets taken over for more than 21$. We should all be very happy at those levels. Hopefully a lot of big owners have changed their mind after these last two quarters.
Duly noted.
How long does it usually take for a CEO to be removed after his/her credibility is so damaged with investors, and within his/her own organization?
I’ve carefully and silently read all of your related posts since February. All I can say you are the king of speculation and I respectfully recommend you should transition your career into writing science fiction novels.
Thanks for the compliment!
Just finished reading all your pieces on this amazing story. Must say I'm quite convinced and will put some money towards some calls. 25$ seems like a bargain for the company. Stock has taken some flak lately though. Any thoughts as to why, except the aborted takeover talks? Is market not believing in an eventual bid from Xavier or Iliad? The best thing to happen going forward would be an activist fund taking a large position and putting some pressure on him to do something.
If you would have to guess on a bid level that would go through, what would that be? Any particular time frame you see?
When Iliad bought Play they announced in September. Xavier took Iliad private at the end of July 2021.
I'm not sure if the market ever priced a takeover by Xavier Niel. First the bid talks released to FT moved the stock. Then Niel moved the stock with his over the market purchases. Now he's been absent since end of May and no real signs of interest from anybody else while talks officially cancelled.
The existing institutional owners have by and large stayed put and further down the shareholder list there has been some movement, such as Gabelli increasing his holding. But my hunch is that if more of a pure activist of size was to show an interest it would probably have already happened by now. It's also not that easy to build a large position without pushing the price, especially not during the periods when Niel has monopolized the trading. The stock has become markedly less liquid this year, indicating a clear effect from Niel's purchases.
As for exact timelines, I have deliberately avoided making such estimates. There are some relevant dates out there -- the end of Niel's automatic purchase plan and the release of the Q2 report, a month from now. There's also the Lati separation which is slated for before end of Q4.
But the truth is nobody outside of Niel's circle can know the end game schedule, and possibly they don't know yet either. An issue that works in favor of Niel is that hardly anything except actual real money coming out of the company seems to move the price of a telco stock these days. Patience is likely needed and that's in short supply in the general market currently and especially also among tested Millicom shareholders. And professional arbitrageurs don't make bets without numbers or a set timeline attached.
Where to begin... It’s a bastard-stock in many aspects, despite the underlying company,s operations been steadily improving as guided by management. A latam operation, registered in Luxemburg and largely traded in Sweden, where the elite is afraid to speak out in favour as a result to numerous disapointments regarding stock-prize. Huge no of private citizens owns the stock and they seem to be silent (sleeping) /clueless owners through various savingsaccounts who where given the stock pro rata when Kinnevik made it’s exit.
Now everybody is in stasis, awaiting XN,s proxy to start buying on the mandate outlined in a recent SEC-filing. (Allowing XN to purchase 8.500.000 stocks despite him being an insider. ) The mandate starts July 3 at the very latest.
Oh boy. This shit turned sour. Better hope the French saves you. Otherwise back to 10 bucks. Hope some people got out at least, know I did.
Nothing of what has been outlined here, has changed?! No one in their right mind could have thought that the final play will come from any other than XN.