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Telephone & Data Systems Inc. Message Board

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  • Are the bankers really advising that USM be sold piece by piece instead of as a whole? Is that really the path to maximize value? I hope these small sales are just pruning before a bigger sale of USM; otherwise, it is not entirely obvious that upside is not being destroyed. This will still do well, in my opinion, selling USM off little by little, but the upside seems much stronger to sell the whole of USM, even with the tax implications.

    I hope time is being spent on those presentations internally, comparing possible scenarios.

    Bidding wars can defy expectations, too.

    At the end of the day, sure would be nicer to have a TDS stock price at $45+ instead of merely a higher revenue level. Cash for USM would just be so much better than USM's revenue. So many willing buyers out there. Let bigger guys add scale and wring efficiencies out of the assets.

    Sentiment: Hold

  • Well, what a nifty 12/17/14 presentation that was just filed this afternoon. Just out of the blue. Really? Just swell, neat, nifty. Airtight. I mean, no holes in that one at all. Nope, none, zero. Super compelling. Very clear on exactly why in the world the USM assets are being held with an iron grip. Very clear on exactly why those assets are best held by TDS and not sold for, I don't know, let's say, ginormous gains.

    Reality: TDS is trading at an enormous discount to book value. Why?

    Let's think through a few possibilities:

    Hmmm... Are the assets on the books overvalued? No, that's not it. Oh yeah, most of the assets on the books are actually worth a lot MORE than the GAAP accounting value.

    Is it the Carlson control discount? Well, probably yes and no. After the Southeastern situation, had to be more of a factor. But, wait, the historical p/book ratio was still much higher than it is now, even post-Southeastern.

    Could it be that the current USM strategy is just lousy and that capital is being destroyed and expected to erode value over time?

    I mean, neat presentation and all, but what is the specific plan to avoid all of the wasted CapEx? Specific plan to actually generate some EVA?

    Here's a really simple solution: sell USM in a rip-roaring auction. Really not complicated.

    VZ could buy and not trigger the HH Index threshold. Take the tax hit. Whatever. There is so much value here, that any kind of large scale sale would unlock massive value.

    What is the purpose of having USM trade on its own, anyway? Obviously not helping TDS' valuation! Probably just complicates things.

    If I were an exec or board member racking my brain how to unlock value - I mean, how in the world could I unlock value here? It's a stumper, real stumper - - - oh yeah, how about we sell USM? Now, that's a nifty idea.

    All my opinion, of course. Happy board discussions.

    Sentiment: Hold

  • Huge asset value on USM for TDS, including spectrum, towers, subscribers, VZ joint venture. JPMorgan has a good conservative estimate. Could be much higher, though.

    Carlson family should sell off USM, in m opinion - likely multiple bidders for most of the assets.

    If the Carlson family wants to preserve TDS as a Fortune 500 company, they could buy broadband assets with the proceeds. TDS would be re-rated considerably higher if the Carlson family were to clearly demonstrate willingness for action on the languishing assets and the company could be valued off of EV/EVITDA more cleanly. Rest of TDS, ex-USM, is still getting limited value.

    Execs should take a good, hard look at USM - what is the real plan for maximizing long-term value here? Why does it make sense to continue to go it alone. Notice all of the huge bids from multiple players in the recent spectrum auction. Why not act while the interest rates are still low and the market is relatively buoyant? No guarantees in coming years. I mean, how much EVA is there really in continuing to plow money into CapEx?

    Recap: current plan is letting USM sit around undervalued in the public market and TDS' other businesses not being reflected in TDS's share price. Why not actively look to unlock value? There is a path where the Carlson family can continue to hold on to some good assets, operate a sizeable company, and where the stock price doubles or more from here. If USM is bought for a 100% premium, that is a very respectable, face-saving result. There is a win-win opportunity. Time for action? Why not now?

    Sentiment: Hold

TDS
24.67+0.20(+0.82%)Dec 26 4:01 PMEST

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