SOT - SP Telemedia

[Aussiejeff]

Good morning folks!

I'm looking seriously at investing a few squid in SP Telemedia for relatively low risk growth over the medium term. The company financials and outlook from here looks pretty strong - just recently won NSW government contract for next five years provision of broadband services to government agencies.. NBN9 going very well etc.

I find it interesting that the average RSI and Chaikin movements are contrary to the share price up to this point in time as well!

Any thoughts?

Cheers,

AJ

[skin]

E Trade have it listed as a good long term buy. I purchase it at .22 cents offloaded some in mid $2 range and still sitting on a large parcel. It is an agressive company and has good management.

[Aussiejeff]

E Trade have it listed as a good long term buy. I purchase it at .22 cents offloaded some in mid $2 range and still sitting on a large parcel. It is an agressive company and has good management.

Nice pickup at .22c skin! ;o)

I'm in today at $1.70.

AJ

[skin]

Aussiejeff
this share makes you feel :swear: especially over the past couple of weeks - though nice forward movement - hopefully hitting its pins - ready to run again.

[Aussiejeff]

Aussiejeff
this share makes you feel :swear: especially over the past couple of weeks - though nice forward movement - hopefully hitting its pins - ready to run again.

Too late! ;o) I took my medicine and dumped 'em at $1.65 for a small loss. Used the $ to buy into Santos for a few days of range trading and a nice overall gain to date. No loss to me I'm afraid!

Cheers,

AJ

[Dutchy3]

For those that watch for stocks in various stages this one might be showing the first signs of consolidation in stage I.

Not a but ... added to watchlist for weekly review in the coming months

[Lachlan6]

Or even possibly a breakout from a small double bottom. Prob going to buy this week. Also have a look at the massive divergence in the RSI from about Jan this year. Surely SOT has bottomed here.

[Alien]

I bought in at 0.78c a couple of months back. I think they are good value at this price and note an increase in share turnover in the last week. May be related to the B Digital takeover ?? or maybe to do with the change in media ownership. NBN9 is a great asset.

Plenty of upside with little downside here. Do your own research pls...


Or even possibly a breakout from a small double bottom. Prob going to buy this week. Also have a look at the massive divergence in the RSI from about Jan this year. Surely SOT has bottomed here.

[Alien]

Price up 8.67% today to .94c.

Anyone have any ideas on the sudden rise in stock price and volume?

I guess this stock could be a possible takeover possiblity. It could be a nice earner for a private equity fund to break up the television, Internet & telecommunication businesses and sell them off separately.

Market cap $351m prior to today which seems cheap to me.

Anybody else have any thoughts on this one??

[Young Gun]

Something seems like its in the works for this company , I have noticed fat profits has featured this in one of their reviews and indicated it a buy at $0.94c , the analysis they did on this company was interested and it seems like they have made some strategic acquisitions that should imrpove revenue steadily.

[Dutchy3]

SOT moving this morning ... good MD 4 : 1 and technically looking safe

[adobee]

Change of media ownership laws could see this looking good in two weeks?

[mrobert38]

Has anyone any ideas on SOT. I have picked up a technical buy signal on my system. SOT seems to be plumbing the depths, though it appears under-valued to me.

[lienad]

sot been trading well the past few weeks closing higher most days. Must have found that bottom now?:eek7:

[iamtrueblue]

Am i reading this company correct. On normal DPS of 2 cents (Not including 2007 abnormal DPS) this stock at current buy is 44.5 cents thus = 4.49% PA return??

There are worse returns out there where a stock is priced higher. Will just depend if SOT can achieve a capital gain. Any comments on this??

[shaunm]

SP Telemedia to merge with TPG

• Creates one of Australia’s largest DSLAM footprints
• Increases eps and cash flow

SP Telemedia to pay 2.4 cent fully franked special dividend

SP Telemedia (ASX: SOT), the telecommunications company that trades as SOUL, is delighted
to announce a proposed merger with the TPG group, one of Australia’s leading internet service
providers. This transaction will expand SP Telemedia’s customer base and network footprint
and will be earnings per share accretive upon completion.

TPG, founded in 1986 by its CEO David Teoh, who will become executive chairman of SP
Telemedia, provides dial-up, ADSL and ADSL2+ internet services to consumers and small
businesses. Its FY2008 revenue is forecast to be $144 million, with EBITDA of $49 million and
after-tax profit of $29 million. TPG has more than 200,000 broadband customers and its own
network, with 238 DSLAMs, and the merger will provide significant opportunities for capital and
operational cost savings.

The merger is to be effected through the acquisition by SP Telemedia of TPG Holdings Limited
for an acquisition price of $150 million in cash, to be funded through debt, plus 270 million SP
Telemedia shares. Completion of the acquisition is expected in April 2008. On the basis of SP
Telemedia’s most recent closing share price of $0.35, this will represent an enterprise value of
approximately $230 million and a FY2008 PE multiple of approximately 8.5x.

Before amortisation and synergies, the combined group, including four months' contribution from
TPG, is expected to achieve revenue of $469 million, with EBITDA of $52 million and after-tax
profit of $20 million for FY2008. For FY2009, revenue is expected to be $607 million, with
EBITDA of $108 million and after-tax profit of $48 million, also before amortisation and
synergies. These figures do not include contributions by Chariot Limited (see below).

The combined group will have one of the largest DSLAM networks in Australia and will be one of
Australia’s most profitable telecommunications companies in terms of profit margin. In addition
to the benefits from combining the SP Telemedia and TPG networks, there will be opportunities
to increase network traffic, bundle and cross-sell both companies' products, rationalise rented
premises, and reduce personnel and administrative costs. Access to TPG's DSLAMs will also
reduce SP Telemedia's capital expenditure as its customer base expands.

TPG owns 70.25 per cent of Chariot Limited (ASX:CTI), a listed internet service provider with a
market capitalisation of $9 million. Assuming SP Telemedia shareholders approve the
acquisition of TPG at a meeting to be held in April 2008, SP Telemedia intends to make a scrip
offer for the remaining 29.75 per cent of Chariot at a price to be determined by an independent
expert.

SP Telemedia also announces its intention to pay a fully franked special dividend (incorporating
the interim dividend) of 2.4 cents per share on 22 May 2008 to shareholders on the register at
17 April 2008. This special dividend, which SP Telemedia’s board intends to pay only if the
transaction is approved by shareholders, will not be paid on shares issued as consideration for
TPG.

Shareholders will be asked to vote on the proposed merger at a general meeting expected to be
held in April 2008. An independent expert’s report will be commissioned to report to
shareholders on the proposed merger.

Washington H Soul Pattinson, which currently owns 46.3 per cent of SP Telemedia, has advised
SP Telemedia that it supports the proposed merger and intends to vote in favour of the
transaction, which will dilute its shareholding to 27.7 per cent. Following the merger, interests
associated with Mr David Teoh (TPG founder and CEO) will own approximately 38.7 per cent of
SP Telemedia and Mr Teoh will assume the position of executive chairman of SP Telemedia.
Mr Teoh will appoint a second director to the SP Telemedia board, which will comprise 5
directors in total following the completion of the merger.

Mr Robert Millner, chairman of SP Telemedia, said: 'The merger of SP Telemedia and TPG will
create one of Australia's largest and most profitable telecommunications companies, with
extensive owned network coverage for voice, video and data applications. We believe that
following the merger SP Telemedia will be strongly positioned to participate in any further
industry consolidation.'

Mr David Teoh, managing director of TPG, said: 'The merged business will be in an enviable
position to continue the strong growth achieved by TPG to date. The extensive IP voice, video
and data network of Soul and its mobile and business product capability, combined with TPG's
DSLAM network and strong consumer customer presence and management, will place the
business in a competitive position for the future.'

The acquisition of TPG is subject to a number of conditions, including:
1. SP Telemedia shareholders approving the acquisition of TPG at a meeting to be held in
April 2008.
2. No event occurring that has a material adverse effect on either TPG or SP Telemedia.
3. No prescribed event occurring before completion in respect of TPG or SP Telemedia,
including conversion, reduction or reorganisation of the capital of either company.

In the event that a director of SP Telemedia fails to recommend or recommends against the
transaction (other than where the independent expert opines that the transaction is not fair and
not reasonable) or the approval of SP Telemedia shareholder is not obtained for the transaction,
SP Telemedia has agreed to pay TPG an amount of $2.5 million.

Mr Teoh has agreed that he will not engage in any business which competes with the current
services provided by TPG for a period of up to 3 years.

SP Telemedia shareholders will receive an Explanatory Memorandum with details of the
transaction and an Independent Expert’s Report over the next four or so weeks.
SP Telemedia is advised by Pitt Capital Partners as financial advisor and Deacons as legal
advisor.

About TPG
TPG was established in 1986 and offers dial up, ADSL and ADSL2+ internet solutions to
consumers and small business. TPG focuses on the high speed, high volume segment of the
ADSL2+ market. TPG also offers a variety of network solutions to corporate customers. TPG
has a controlling shareholding in Chariot Limited (approximately 70.25 per cent). TPG currently
has 238 DSLAMs and will continue to roll out DSLAM infrastructure.

Contact
David Teoh
Managing Director
(02) 9850 0800
About SP Telemedia

SP Telemedia (ASX:SOT) delivers video and voice over IP as well as standard WAN data
service to 98% of the population. Its broadband network employs over 320 network access
points and data collection centres in 66 call collection areas to reach the majority of regional
communities across Australia. The advanced IP carrier backbone ensures high quality end-toend
performance carrying a multitude of applications that previously required specialised or
dedicated network infrastructure. It was also the first IP network in the world to deliver next
generation real-time digital TV. This capability has attracted key corporate and government
contracts. The company has a strong consumer presence as a major full-service
telecommunications provider to over 500,000 consumers nationally.

Contact
Robert Millner
Chairman
(02) 9232 7166
Media enquiries:
Ashley Rambukwella, FCR (02) 8264 1004

[lienad]

again getting close to low of .24c which is looking tasty again. parent co going well of late SOL. any news on the merger with TPG?

[shaunm]

The merger with TPG is done & dusted. David Teoh is now the CEO and is really going to get this Telco up and going like it should be.:)

[Brengun]

Was just reading the 2005 threads with the shareprice.
Massive drop to todays price of 0.125
Where the heck is the bottom of this one? Are we there yet, are we there yet, .....? :rolleyes:

[ghotib]

Half-yearly results released this morning and SP up 34% as I type. I'm now only 15% underwater on them <Yippeee!!>

They've declared a 1cent dividend because of improved profits and strong cash flow. Any comments?

Ghoti

[Trade wind]

Anybody following these? SP Telemedia owns Soul and TGP. I'm no expert in telecoms but as a bit of a geek, I know that Soul acquired a bad rep a while back for poor service, but TGP have impressed as a very competitive broadband/mobile provider with aggressive growth strategy. Rising profits, recent director buying and dividend announcement seem to point to SOP being undervalued, but there doesn't seem to be a lot of interest in this one. Any good reasons not to invest in SOT?

[ghotib]

Yep. I'd like the price to drop again until I've bought some more. And I'd particularly like the price to drop for the next few weeks so the DRP price is lower ;)

I'm a nano-scale investor with very little capital and not much of an income. I like to accumulate boring small caps that don't attract much interest and whose management concentrates on growing the business, which means I'm accepting an inherent risk of low liquidity. This company suits me, but I'm not exactly your typical trader.

Ghoti

[GaryS]

Have acquired Pipe Networks.

Is this a good move?

Anyone with some info/ Thinking of buying into this small cap

[ghotib]

I hold SOT (probably soon to change its name and presumably code), so I'm pretty happy at the moment. I'm also in the DRP, so I'll be increasing my holdings slightly in a week or so.

However for a long-term hold I think there's plenty of time to decide whether to buy into TPG at current prices or higher. The deal is conditional on finance, and not due for completion till April; we won't know for a while how much they actually borrow or on what terms. We also won't know for even longer how customers, current and potential, respond to the combined company. And of course there's the uncertainties of Telstra and the NBN. OTOH, the company has done very well over the last 18 months or so, notwithstanding a stomach-churning fall in share price.

I'd been thinking about PWK for a few months, but I wouldn't have paid this much for it. However I couldn't have made direct use of its technology. At this stage I intend to hold SOT and see what happens. If I get nervous I might withdraw from the DRP.

That's not much help is it? But I really do think there's no need to hurry.

Cheers,

Ghoti

[dbcok]

I have been watching these for months but ,silly me,never bought in.In about five months they have gone from under 30 cents to today about $1.50.I have my internet with them and a virtual phone card (ten cents for unlimited std calls anywhere in Aust)
They are very ambitious and keen to increase market share.
Whether the 400 million debt raising will inhibit them for a while-probably.
With the PWK purchase they will be able to enhance and add to their service in the three major cities.
As with all equities SOT are a matter of faith....but they seem to have made the right moves so far.

[Joe Blow]

SP Telemedia (SOT) is now known as TPG Telecom (TPM).

Discussion of this company now continues in the TPM thread, which can be found here: http://www.aussiestockforums.com/forums/showthread.php?t=18213

This thread has now been closed.