Once upon a time, the idea of a selling stocks was to raise capital.
These days, it seems to be mostly about paying off debt and bond holders. No wonder the market's dysfunctional.
British mast outfit Arqiva has pulled out of plans for a £6bn IPO, citing "market uncertainty" as the reason for a lack of investors. It comes just two weeks after the firm announced its intention to float on the London Stock Exchange this month. In a statement, the company said: "The Board and Shareholders have decided that …
Once upon a time, the idea of a selling stocks was to raise capital.
Well, neither investors nor regulators like the risks involved in real startups, and the institutional investors aren't interested in anything with a market capitalisation less than £50-£100m. The levels of bureaucracy and cost in raising capital on a major trading exchange are very high, so it isn't a cheap way to access capital. That's why startups have to rely on friends and family, "business angels", private equity and venture capitalists. Or things like Kickstarter.
Arguably the Kickstarter concept is excellent, and fills in for the sclerosis of modern equity exchanges, but the process looks a bit rough around the edges - needs better screening of crap ideas and dodgy founders, better prospectuses, and it needs to educate investors more. In reality the regulators hate Kickstarter, and want to smother the whole thing, and that's the problem - how much regulation and oversight should an equity investment platform have? At the moment the regulators believe you can never have enough, but that reduces the stock exchanges to mere secondary trading platforms, best suited to institutional investors, with zero first time equity raising.
Arqiva are not my favourite company in the world. I used to work in radio broadcasting for a large broadcaster and once had a 'fun night'. I was contacted by a listener one night to say that all of our multiple stations had gone off air on Sky. I was then contacted by Homechoice to say that they weren't receiving our feeds either. Having checked that this was indeed the case on Sky, NTL etc. with a fellow engineer we notified a few internal people of the problem. We then contacted Arqiva on the direct line number we had for them and asked if they had a problem. Also why had no one contacted us to say there was a problem? Bloke we spoke to said "Ah that's not my area I deal with radio TX only and if it's TV TX you need to speak to the the TV side." We asked if they had an extension number or could transfer us to which the answer was "No sorry I don't".
Slightly perplexed by that answer we reasoned that the TV side must be in another building or even another site. My colleague tried calling our communications provider to see if there was a fault on the lines. I phoned the switchboard for that Arqiva site. I got through to a very nice security guard who was the only person on reception after hours. I identified myself and explained that I needed to speak to the TV TX desk. I mentioned that I'd spoken to the radio desk already who couldn't help contacting the TV side. He gave me another number which was one digit away from the radio one and said they sit next to each other. Someone was mucking you around mate.
We talked to them identified that it was a fault with our lines to Arqiva and it was fixed fairly quickly. Can't remember what it was off hand but nothing too serious. The question still remained though why had our services been off air for that long and Arqiva hadn't contacted us? I wasn't involved in the post mortem of the event so don't know the outcome but it stuck in the mind that they were crap.
The usual suspects names are in the frame:
"Arqiva, which is owned by Canada Pension Plan Investment Board and Macquarie, is Britain's largest owner of mobile, TV and radio towers and works with the likes of BBC, ITV, Channel 4, Channel 5.
The company had hoped to raise £1.5bn through the IPO and use the proceeds to pay down debt.
The deal would have given the group a market value of £4.5bn and £6bn including debt.
Goldman Sachs, HSBC and JPMorgan had been mandated to run and co-ordinate the deal, according to Reuters." from
Or if you'd like a more reliable source, try this:
"Rothschild is also advising Arqiva and HSBC, Goldman Sachs and JPMorgan Cazenove were managing its listing." from
The firm began in 1922 when the BBC made its first radio broadcast
The above was also mentioned in an earlier report about Arqiva, and as far as I am concerned is simply not true. The BBC built, owned, and operated its own transmitters from its inception until selling the network off in the late 1990s.
Arqiva's existence can be traced back to the 1950s when independent television started, when it was part of the Independent Television Authority since when it has mutated into its present form.
Can you please explain how you can claim the firm began in 1922?
...a very half-arsed reading of the Wikipedia page for Arquiva
It would need to be very half-arsed, given that the sentence given over to "History" reads as follows:
The company, which has a history that dates back to the beginning of regular public broadcasting in the United Kingdom, was actually only formed in 2005. Below is a potted history of the various organisations that are now part of Arqiva:
A rather better summary, I think.
At best it's lazy reporting - ah for the El Reg tombstone icon - that makes for an interesting claim in the text, even if it does stretch the credulity of readers who know the actual situation.
Arqiva's primary history is that of the IBA tranmitter network as you rightly point out - hence Winchester.
The BBC aspect is because Arqiva (still the IBA bit) bought National Grid Wireless which is where the former BBC transmission ended up (via Crown Castle), until it was Borged by Arqiva.
So the "Started - BBC - 1922" connection is deeply tenuous but strictly true, even if it only applies to a sizeable chunk of the current Arqiva.
So according to dear'ol Aunty-
"Its clients include the BBC, ITV and international broadcasters and its masts cover about 98% of the UK."
Which is nice. But then servicing and maintaining those masts is rather expensive given power, wayleave costs etc. Some are used to transmit the telly, which is nice.. but also restricted by UK DTT 'regulations' and a walled garden preventing competitors from challenging the establishment. Which isn't good for future revenues. Nor is expansion of satellite TV given Sky has it's own teleports and there's competition in that sector. Then there's public service radio, and big contracts like 'smart meter' rollout.. Which isn't going very well because the meters aren't that smart. But they are reassuringly expensive, although how that gravy is spread between Crapita and other 'service providers' is, of course, commercially sensitive.
So I suspect prospective investors are looking at the valuation and asking some pointed questions, especially regarding debt..
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