janebolacha
09 Dec 2015
Re: This makes it seem fair value then, or g... The EV (Enterprise Value) is now 820m pounds (according to Stockopedia).The value of the owned content is over 800m pounds (according to Investec).So ETO is now, after yesterday's pounding, at no more than break-up value.Potential predators, private equity firms or management buy-out firms mustbe looking at this now. The share price is, imo, absurd.
sage in the hills
08 Dec 2015
This makes it seem fair value then, or good ...... and hence sp drop an over reaction, so quite a big bounce potential.Could do with a more positive stance on current and future film slate; anything doing ?"Shares are down on possible short and stop loss activity after what looks an expensive debt refinance. However, our Investec debt analysts suggest this is not an unreasonable rate for a B+ credit rating. The refinance also extends term and financing visibility in a rising interest rate environment with more B/S flexibility for growth. With sentiment reaching new lows on short-term momentum selling, we see good long-term value on a CY16E P/E of 9x and adj. EV/EBITDA of c. 7x. Adj. catalogue value is c. £800m vs EV at c. £1bn.New £285m senior secured note issued at 6.875% to 2022 replaces the previous January 2018 $504m bank facility. A new £100 revolver is also expected.Forecasts – FY16/17E EPS is -2%/-6% to 19.3p/19.6p incl. share option charges. New facility at 6.875% vs previous bank debt at c. 5% adds c. £7m FY net finance charges (£6m pure interest plus arrangement fee amortisation) to take our FY17E interest to £21m (£14m before).Why now? ETO has clearly signposted its desire to tie down long-term debt financing. ETO would need to refinance its existing facility in the next 6M vs rising UK/US interest rates implying that the sensible course is to go early.Why not roll bank debt? This is increasingly complex to syndicate given higher fixed debt, and rising interest rates are unhelpful. Also, the bond is covenant light and has no repayment ratchet. Our debt analysts suggest ‘vanilla’ 5 year spread rates at 300-400bps over LIBOR (c. 100bps) with another 150bps for a 5 year fixed swap (180 bps/7 years). This would still imply 6% plus net.Fairly priced in debt market terms – as an equity analyst, the bond coupon looks high, but our debt analysts see the coupon as fair and arguably at the low end given the size, lack of track record and a B+ credit rating. If we reference international media indices (550bps spread over gilts) and B+ investment grade (510bps premium) on a 7 year gilt (145bps), this implies closer to a 7% coupon requirement – we understand the price guide was over 7%, but good demand brought this in. The recent comparable UK mid cap media transaction is Perform’s £175m 2020 secured loan note at 8.5%, so higher than ETO."AlphavilleSAGE
janebolacha
08 Dec 2015
Re: Comment on FT Alphaville Claude, it starts at 11.28am.
sage in the hills
08 Dec 2015
Canadian Pension Fund Surely the Canadian Pension Fund wont be very happy ..... DYOR AND Marwyn WILL be very happy DTOR (DONE THEIR OWN RESEARCH )SAGE
sage in the hills
08 Dec 2015
After a Rights Issue .....this is back to 2011 prices ????? .........SAGE
claude reins
08 Dec 2015
Re: Comment on FT Alphaville Cant see anything, Can you be more precise, or have I missed it and it has timed out for this specific information.
Punilux
08 Dec 2015
Re: Surely the value of ETO is the library calculation less debt plus interest? If the price of credit is increasing then the asset has to rise by a similar amount.. In fact, it could be argued, the library value is falling due to the massive drop in DVD/blu-Ray sales.I bailed out when the cartoon pig with a head like male genitalia was given a "value" which may well be true but I simply don't understand!
janebolacha
08 Dec 2015
Comment on FT Alphaville [link] halfway through, commentary from Peel Hunt and Investec, differing views.
bulltraderpt
08 Dec 2015
Re: There's a rumour going around there is an Islamic hedge fund shorting Peppa Pig. I can't think why......
janebolacha
08 Dec 2015
The share price is now very substantially below the independent value of the library of content.This is from the interim results RNS:" The value of the Group's content library, as at 31 March 2015, had increased to over US$1 billion with further upside to come following the ABD transaction"That would be about 650 million pounds, at the very least.With 333m shares in issue, the market is valuing ETO at below 500 million pounds.Madness! I picked up some at below 141p just now.
Anewinvestor
08 Dec 2015
Re: Tipped for 2015 So whats the next target ?
janebolacha
08 Dec 2015
Re: Share price fall "Related Issuers Entertainment One LtdRelated Research[The document is not a part of your current subscription.] Covenant Quality Assessment: Entertainment One Ltd: Covenant Quality Pre-Sale Snapshot: £285m _% Senior Secured Notes due 2022Rating Action: Moody's assigns Ba3 corporate family rating to eOne; outlook stableGlobal Credit Research - 01 Dec 2015London, 01 December 2015 -- Moody's Investors Service has today assigned a Ba3 corporate family rating (CFR) and a Ba3-PD Probability of default rating (PDR) to Entertainment One Ltd ('eOne' or the 'company'), a leading independent global film distributor and a TV programming producer.Moody's has concurrently assigned a B1 rating to the GBP285 million Senior Secured Notes (due 2022) being issued by Entertainment One Ltd. The rating of the Notes is one notch lower than the CFR due to the presence of GBP100 million of contractually senior revolving credit facility (RCF; due 2020; unrated) in the company's capital structure. The outlook on all ratings is stable.RATINGS RATIONALEeOne's Ba3 CFR considers: (1) the company's market leading position as a multi-territory independent film distributor with an extensive library of content rights to exploit; (2) strong relationships with cinemas, retail distributors and media platforms which leave eOne well placed to monetize content rights across all media windows; (3) revenue diversity from a large portfolio based film distribution model that ensures margin stability and an advantageous funding model for TV production; (4) solid growth potential for eOne's Television business which accounts for 42% of overall revenues; and (5) eOne's financial policy of managing its reported net leverage (as defined by the company) broadly between 1.0-2.0x while pursuing add-on acquisitions and investments necessary to execute its well defined future growth strategy.These strengths are balanced by: (1) eOne's relatively small scale of overall revenues and EBITDA; (2) sustained decline in its revenues from home entertainment releases on DVDs / Blu-Ray (36% of overall film division revenues for the six months ending 30 September 2015); (3) year-on-year variation that could occur in eOne's films distribution revenues depending on the quality of its own film release slate as well as general box office performance; (4) risk of not being able to fully recoup the acquisition, production, marketing and distribution costs associated with the acquired/ produced films and TV programmes that do not perform well enough; and (5) industry-typical challenge to continuously refresh intellectual property and to retain key creative personnel particularly for its TV production business.The Ba3 rating is based on Moody's expectation that eOne will remain focused at keeping its reported 'adjusted' net debt leverage ratio between 1.0x-2.0x over the medium term and will structure any bolt-on acquisitions in a manner such that it can respect its own financial policy leverage target range. In October 2015, eOne completed the acquisition of 70% of the issued share capital of Astley Baker Davies Limited (ABD) that jointly owns ownership rights to Peppa Pig with eOne for GBP140 million. In order to fund the ABD Acquisition, eOne raised approximately GBP194.7 million (net of expenses relating to the rights issue) by way of a rights issue. The remaining proceeds after the ABD Acquisition were used to pay down existing revolving debt facilities. Pro-forma for the proposed re-financing, acquisitions during the fiscal year ending 31 March 2015, recent acquisition of ABD and the rights issue, eOne's net leverage (as calculated by the company) would have been 1.2x at the end of FY2014/15 (compared to around 2.0x for the same period, based on reported figures). In its calculation of 'net debt' the company excludes non-recourse production net debt (GBP78.7 million as of 30 September 2015 compared to GBP89.3 million as of 31 March 2015), which compr
lambrini girl
08 Dec 2015
Re: Tipped for 2015 248 only stalled the fall..185..150..<<<BANG ON!!..u wos warned..
janebolacha
08 Dec 2015
Re: Share price fall Moodys report:[link]
Biscuit Barrell
08 Dec 2015
Re: Share price fall The fall is too extreme for it to be explained by a slight shift in position from an analyst who is still targetting 280p
