COMPANY COMMENT: SEARDEL

IT SEEMS e.tv is not sending out a clear enough signal to the investment community.

Seardel — which now holds a majority stake in Sabido Investments (comprising e.tv and other media assets) — is seeing a rather wide spread between its low-voting N shares and ordinary shares. In recent weeks the N shares have been bid at 136c and offered at 147c, and ordinary shares have been bid at 160c and offered at 170c. That’s a differential of about 20% on shares with exactly the same economic value.

In addition, the issue of the “disenfranchised” N shares is irrelevant since there is no disputing that HCI is the undisputed controlling shareholder of Seardel, whichever basis you use. So the question really is, which class of share offers the most accurate reflection of Seardel’s value? Since both classes of share are fairly illiquid, it seems unlikely the spread will narrow until Seardel brings out its first set of results as a pure media company.

Of course, one of the outstanding questions is when Remgro, the other major shareholder in Sabido, will swap its unlisted holding for shares in Seardel. Pertinent to this question is whether Remgro would swap its stake in Sabido for Seardel N shares … perhaps on a promise that the dual share class structure will eventually be dismantled?

Source: BDLive