Forum Archive Index - September 2002

[" Hans van der Voorn" <vandervoorn@xtra.co.nz>]

As an alternative strategy, I sold my UNL shortly after the sale was
announced and bought Aquila (US:ILA) in the US at $2.41. They last traded at
$3.83. I missed out on a bit with the UNL shares, but have gained a lot more
on the ILA. Following the announcement of a sale (which I expect to be of
shares in UNL not the assets of UNL), Aquila's liquidity problems will be
well sorted out. I'm not sure how they account for their UNL stake but if
they consolidate everything as you would expect, then the Aquila balance
sheet should look a lot better after the sale because UNL trades at a very
high price/NTA ratio and has quite a lot of debt in its own right. When I
last calculated it, Aquila should get in the range of US$475m in cash, lose
about 10% of that in assets, and lose their share of UNL's debt from their
own balance sheet.

Remember that Aquila used to be safe boring old Utilicorp from Kansas, power
lines and gas pipes, with a share price of around $30, which is where they
want to get back to. They have obviously lost some value and credibility
that with the foray into energy trading ( a write down of $5 odd per share)
but there is clearly a lot of room for upside, certainly more than you could
reasonably expect to get from hanging onto UNL.

If you want to research it for yourself, try www.cbsmarketwatch.com Go to
the research section where you will find P&Ls and Balance sheets for the
last 4 yrs and for the last 4 qtrs as well. Analysts forward estimates and
opinions for what they're worth and charts are also there.

Hans

Disc, hold ILA, purchasing more, hold no UNL


----- Original Message -----
From: <tennyson@caverock.net.nz>
To: <sharechat@sharechat.co.nz>
Sent: Sunday, September 08, 2002 10:23 PM
Subject: Re: [sharechat] UNL - Is now the time to sell ??


> Hi Andrew,
>
> >
> >
> >I read with interest that UNL shares have risen in
> >price $1.10 to $9.30 since the announcement that
> >Aquila is looking to sell it's shareholding.
> >
> >Are there any compelling reasons to hold onto my (minor)
> >shareholding acquired for free when Power NZ was
> >privatised or is now the time to exit ?
> >
> >
>
> My reading of the situation is that United Networks is to be broken
> up and sold.  In the past, the fear would be that the big
> shareholders would try to pull a 'fast one' taking away the baby and
> leaving the small shareholders the bathwater.
>
> Fortunately the adoption of the NZ takeover code means that small
> shareholders must be treated equally with large shareholders.
>
> In essence if you sold tomorrow, the timing probably wouldn't be bad.
> After all, no one ever went broke by making a good profit.
>
> But why not just hold on and see how things develop?  There is a
> bidding war for the assets so you may get a little more out of it
> yet.   By holding on, you get to keep your profit *and* avoid paying
> any brokerage.  If it were me, I'd be in no hurry to sell.
>
> SNOOPY
>
> disclosure; No shares held
>
> ---------------------------------
> Message sent by Snoopy
> e-mail  tennyson@caverock.net.nz
> on Pegasus Mail version 2.55
> ----------------------------------
> "Stay on the upside of the downside,
> Anticipate the anticipation!"
>
>
>
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