Goldman Sachs, UBS and Pipex

Goldman Sachs have issued a buy note on Pipex saying:

“The market is taking too bearish a view of the company’s strategic value in a consolidating broadband market, while its solid operating performance and potential for cost savings limit the downside risk.” Goldman also noted that Ofcom had proposed lifting restrictions on a rival wireless internet operator, making Pipex’s competing unit more valuable. Shares rose ½p to 13p.”

Personally I’ve not read the research, but I’m sure it is full of the normal plethora of caveats that come with any research reports. However, the most important fact about Pipex is that UBS (16.01%) and Goldman Sachs (11.19%) are two of the largest shareholders. The other important pressure point for Pipex is the £91.5m convertible bonds of which I’m currently unsure of the ownership. In fact UBS has so much influence that it is running the current strategic review of the group which will determine the sale or not of certain of the Pipex assets.

Basically, I have no problems with Goldman Sachs or UBS issuing research, but I do think that The Times or any other paper should disclose in their articles that Goldman Sachs own 11.19% of Pipex. Similary, when newspapers, such as the Telegraph describe UBS as Pipex's adviser, I think they also should describe them as a major shareholder.