SKT Sky Network Television Limited.

[mistaTea]

Moose are you saying it could potentially be $141m Plus the debt of $108?

That is exactly what it is.

[mistaTea]

Moose are you saying it could potentially be $141m Plus the debt of $108?

Just think, after they do the deal…

Pooman can do another capital raise to pay off the debt.

He has the template now…

[jimdog31]

Agreed that the devil is in the detail but I question the strategic direction and whether this is the best use of SKY's funds. Their core business is still under a multitude of threats, they need to retain/expand content and attract further institutional investors. Not to mention pay dividends again to long suffering investors. This adds a whole new level of risk to SKY's business and could go terribly wrong.

While I strongly agree with you, it depends on what cost synergies the combined entity could potentially achieve, and the diversification of their revenue streams could also make them less risky.

Discussing with Mr T tho, I feel it makes it less likely it would be acquired in the future as it becomes a much more complicated acquisition target.

One would have to question why Sky thinks it could make the outdoor, radio and Tv play work when it already didnt work when TV3 was involved.

From the 2018 merger spiel

It will be difficult to match the combined capabilities of this new multi-media group in New Zealand. This strategic approach is at the forefront of developing global industry trends and is the right decision, with the right partner and at the right time for QMS

[jimdog31]

That is exactly what it is.

At $250m what earnings multiple is that???

[Muse]

At $250m what earnings multiple is that???

what multiple - EBITDA, EBIT...?
PE will be negative off equity value

[jimdog31]

what multiple - EBITDA, EBIT...?
PE will be negative off equity value


Yes I believe the $150M would be equity value.

GAAP loss is not relevant because the depreciation /amortisation charge is way high ($27M). Stay in business CAPEX probably only $5M.

So the business probably produced Owner Earnings of $15M-$20M (a multiple of 7.5 - 10x).

FCF was around $15M.

No way are they selling this kind of earnings profile for $45M to Sky.

Was referring to this calc that MrT was doing, turns out he'd already answered.

Using this multiple of 7.5-10x would be bonkers, what should SKT be valued at using the same calcs?

[mistaTea]

At $250m what earnings multiple is that???

It just adds up to TOO DAMN MUCH.

Our EV is currently $310M.

We are going to buy a much smaller business than ours (in terms of revenue, FCF, tangible assets and GAAP earnings) for just $60M less than our business is worth?

I should think not!!

[snigmac]

NBR states revenue (possibly for the current Mediaworks without TV3 entity) at 205m (possibly annual).

Look guys, Mediaworks was in receivership. The company continues to make a loss.

Sky, if they are proceeding with a purchase, will pick this up for peanuts. The alternative is that Mediaworks can IPO and fail.

[jimdog31]

NBR states revenue (possibly for the current Mediaworks without TV3 entity) at 205m (possibly annual).

Looks guys, Mediaworks was in receivership. The company continues to make a loss.

Sky, if they are proceeding with a purchase, will pick this up for peanuts. The alternative is that Mediaworks can IPO and die.

PE hasn't turned the business around for sure, SKT board has rocks in their heads if they think they can.

[Muse]

Was referring to this calc that MrT was doing

ah missed that one in all the posts

funny (and dumb story) - about a year and a half ago I put in a purchase order of sky. Not a big one at all by any means....I just thought maybe nice to have a taste...but right after the order lodged I thought WTF have I just done did I really just buy Sky, and went and tried to cancel it so I could think about it some more. Within that 10 second period I wound up buying about a thousand shares, which are now up substantially. that little moment of doubt cost me a lot of paper money!

[Entrep]

Without knowing any of the details I'm afraid this might be the worst possible outcome for shareholders. Forget about buybacks and dividends. Forget about any future takeover. And I think the SP will go down on this news, not up. What are they thinking - radio and outdoor advertising? They need to defend their core business and add a telco if they want to have any future. Looks like a monumental error to me if true.

Agreed. This is highly disappointing.

[winner69]

Our Sophie loves Tova - rates her highly, one of the best broadcasters in NZ she thinks

Buy me the radio station that Tova works for Sophie tells Jarden

Tova O'Brien alone is worth $50m

[LaserEyeKiwi]

Lol radio. RADIO. Ha ha ha. What a let down.

https://www.nzx.com/announcements/393305

Sky addresses media speculation

Sky Network Television Limited (NZX/ASX: SKT or Sky) wishes to address recent speculation in the Australian Financial Review and other media sources in relation to Sky’s possible acquisition of MediaWorks Holdings Limited (Mediaworks).

Sky advises that:
- it is currently in exclusive negotiations with Mediaworks shareholders regarding a potential acquisition of MediaWorks’ radio and out of home advertising business;
- the likelihood of a transaction proceeding is still highly uncertain with discussions and due diligence ongoing and incomplete; and
- under the current proposed transaction structure if an acquisition of Mediaworks proceeds, it would not require Sky to raise new equity but would require approval of an ordinary resolution by shareholders at an Extraordinary Shareholder Meeting.
Sky indicated at the time of announcing its interim results on 24 February 2022 that it is assessing opportunities to invest capital to accelerate the growth of the business, generate new revenue streams, and deliver improved returns for shareholders.
Sky management and Board see the possible acquisition of MediaWorks as consistent with this strategy.
We confirm Sky Network Television Limited is in compliance with its continuous disclosure obligations under both the NZX Listing Rules and the ASX Listing Rules.

[LoungeLizzard]

Lol radio. RADIO. Ha ha ha. What a let down.

https://www.nzx.com/announcements/393305

Sky addresses media speculation

Sky Network Television Limited (NZX/ASX: SKT or Sky) wishes to address recent speculation in the Australian Financial Review and other media sources in relation to Sky’s possible acquisition of MediaWorks Holdings Limited (Mediaworks).

Sky advises that:
- it is currently in exclusive negotiations with Mediaworks shareholders regarding a potential acquisition of MediaWorks’ radio and out of home advertising business;
- the likelihood of a transaction proceeding is still highly uncertain with discussions and due diligence ongoing and incomplete; and
- under the current proposed transaction structure if an acquisition of Mediaworks proceeds, it would not require Sky to raise new equity but would require approval of an ordinary resolution by shareholders at an Extraordinary Shareholder Meeting.
Sky indicated at the time of announcing its interim results on 24 February 2022 that it is assessing opportunities to invest capital to accelerate the growth of the business, generate new revenue streams, and deliver improved returns for shareholders.
Sky management and Board see the possible acquisition of MediaWorks as consistent with this strategy.
We confirm Sky Network Television Limited is in compliance with its continuous disclosure obligations under both the NZX Listing Rules and the ASX Listing Rules.

I've got a bad feeling about this....

[winner69]

No worries - Sky indicated at the time of announcing its interim results on 24 February 2022 that it is assessing opportunities to invest capital to accelerate the growth of the business,generate new revenue streams, and deliver improved returns for shareholders.

Tova will see to that ……Tova and Sophie both have that hard stare look so should get on well together.

[The Punter]

..So...we jump on the boat to go 'Big Game Fishing', hoping to catch a Marlin or a Great White....and we hook a Spotty...

[LaserEyeKiwi]

Next thing you know they are going to buy a fax machine distributor.

[winner69]

At least not going to plead for more cash from shareholders

But shareholders see the mountain of cash disappear ….probably for good

[winner69]

Next thing you know they are going to buy a fax machine distributor.

…what’s a fax machine LEK

[Arbroath]

Next thing you know they are going to buy a fax machine distributor.

Post of the day!

[JohnnyTheHorse]

Not really worth commenting on until the terms of the deal are seen. Although not my preferred option, anything can be worthwhile at the right price.

In any case, if this proceeds you will get your say as it'll require approval via shareholder vote.

[freebee]

"under the current proposed transaction structure if an acquisition of Mediaworks proceeds, it would not require Sky to raise new equity but would require approval of an ordinary resolution by shareholders at an Extraordinary Shareholder Meeting."

So we all get to vote on this before it happens right?

[DeathByWarriors]

Are they looking at Video-Ezy too?

[winner69]

Not really worth commenting on until the terms of the deal are seen. Although not my preferred option, anything can be worthwhile at the right price.

In any case, if this proceeds you will get your say as it'll require approval via shareholder vote.

Gives you an idea of the value of the transaction if needs a vote

Vote a formality anyway ….just like Boris today

[snigmac]

If Sky can buy the entity for around 50-75m and take on the debt, I don't think it would be that bad a deal. Will be interesting to see what the terms are.

[LaserEyeKiwi]

On the plus side, this will be put to a shareholder vote to approve (according to sky’s release this morning) - so can still be blocked (no doubt with a discouraging break fee).

If it fails I think we can say goodbye to the chair and CEO fairly quickly.

But lets give them a chance to flesh out the details first, like already mentioned Mediaworks appears to be spitting off positive free cashflow, with its net loss coming from a large amount of depreciation/amortization - so there might actually be a solid company there.

Sky might also be prioritizing its revenue diversification efforts as the NZR re-negotiation gets closer on the road map. With the silver lake deal done, NZR is extremely flush with cash and it would be the perfect time for them to consider a direct to consumer model for a 100% NZR owned streaming rugby product to be developed, which would be devastating for Sky who would then be left with possibly just the scraps (a licensing deal aimed at only the satellite product for hard to reach rural customers with poor broadband access). So building up the alternative revenue streams (broadband/Mediaworks) will ease that risk somewhat.

[Balance]

Acquisition of MediaWorks could be exactly what a KKR would want to bulk up Sky.

Meanwhile, time to run to the hills for many shareholders and SELL SELL SELL!

[mistaTea]

We really have to see what the terms of the sale are before we can make any firm judgements.

We know Mediaworks comes with $100M of debt that we have to assume, so it is all going to depend on how much $$$ we have to part with.

In principle, management should be looking for opportunities with the cash to help grow the business (as opposed to just handing it over to shareholders). Whether buying a radio station and and some billboards is the right thing to buy...well, it is kind of similar to if we did a merger with NZME (just without the newspaper). It is a way for Sky to diversify revenue streams, and there will be some cost synergies there (though probably not huge ones).

The new business would have $1B+ in revenue, and roughly a third of that revenue will come from advertising + boradband (i.e. they are finding ways to grow revenue but make the percentage of that total which comes from pay TV subs less). By my reckoning, Owner Earnings would probably increase by $15M-$20M (pre synergies). So that would keep Sky's total Owner Earnings in the $70M-$80M range.

It will be interesting to see how the market views such a transaction.

[mistaTea]

On the plus side, this will be put to a shareholder vote to approve (according to sky’s release this morning) - so can still be blocked (no doubt with a discouraging break fee).

If it fails I think we can say goodbye to the chair and CEO fairly quickly.

But lets give them a chance to flesh out the details first, like already mentioned Mediaworks appears to be spitting off positive free cashflow, with its net loss coming from a large amount of depreciation/amortization - so there might actually be a solid company there.

Sky might also be prioritizing its revenue diversification efforts as the NZR re-negotiation gets closer on the road map. With the silver lake deal done, NZR is extremely flush with cash and it would be the perfect time for them to consider a direct to consumer model for a 100% NZR owned streaming rugby product to be developed, which would be devastating for Sky who would then be left with possibly just the scraps (a licensing deal aimed at only the satellite product for hard to reach rural customers with poor broadband access). So building up the alternative revenue streams (broadband/Mediaworks) will ease that risk somewhat.

I agree with this wholeheartedly. The announcement has come as a bit of a 'shock' because the original AFR article made us think that Sky was in play.

But we have to wait and see what the terms of the acquisition are before we can get too carried away.

If they are not going to sell the business, then they do have to find opportunities to grow and diversify revenue streams. Continuing solely as a pay tv content aggregator just won't cut it.

[winner69]

On the plus side, this will be put to a shareholder vote to approve (according to sky’s release this morning) - so can still be blocked (no doubt with a discouraging break fee).

If it fails I think we can say goodbye to the chair and CEO fairly quickly.

But lets give them a chance to flesh out the details first, like already mentioned Mediaworks appears to be spitting off positive free cashflow, with its net loss coming from a large amount of depreciation/amortization - so there might actually be a solid company there.

Sky might also be prioritizing its revenue diversification efforts as the NZR re-negotiation gets closer on the road map. With the silver lake deal done, NZR is extremely flush with cash and it would be the perfect time for them to consider a direct to consumer model for a 100% NZR owned streaming rugby product to be developed, which would be devastating for Sky who would then be left with possibly just the scraps (a licensing deal aimed at only the satellite product for hard to reach rural customers with poor broadband access). So building up the alternative revenue streams (broadband/Mediaworks) will ease that risk somewhat.

Spitting out positive cash flow?

Allow for lease / rental payments (and finance costs) cash flows don’t look too flash

[whatsup]

Where is SKY's management skills coming from to manage Mediaworks , Mediawork !! ?

[winner69]

Where is SKY's management skills coming from to manage Mediaworks , Mediawork !! ?

Tova will take over from Cam as ‘Divisional Chief’

Cam probably be very happy if it all goes ahead

[freebee]

Its a big no from me ... i'm thinking the SP might get smashed today

[Balance]

its a big no from me ... I'm thinking the sp might get smashed today

sell

sell

sell

[LaserEyeKiwi]

Spitting out positive cash flow?

Allow for lease / rental payments (and finance costs) cash flows don’t look too flash

Oh interesting - sorry was parroting earlier comments, is it cashflow positive at least after including lease/rental/finance costs?

[winner69]

Acquisition of MediaWorks could be exactly what a KKR would want to bulk up Sky.

Meanwhile, time to run to the hills for many shareholders and SELL SELL SELL!

Yep, Take SKY with Mediaworks and then KKR have something to spin off in a few years time for a big profit ... while keeping a better run SKY

[Old mate]

Are you looking for a few cheapies balance:t_up:

[Moneyman]

If someone is going to make a meaningful offer for Sky surely it’s now before this deal gets done!

[Joshuatree]

Tova will take over from Cam as ‘Divisional Chief’

Cam probably be very happy if it all goes ahead

Cam? Cameron Slater ,now there's a thought!:)

[bull....]

as the dinosaur ages i guess they have to find revenue streams why they still can

[Entrep]

Down 5% on open as expected.

How do business leaders continually get sucked into to purchasing dying assets by the bloody bankers!!!

[Monarch]

I fail to see how this deal materially addresses the fundamental problem (in my view) of the satellite subscriber losses. The opportunity for bundling etc here seems limited.

[LoungeLizzard]

Down 5% on open as expected.

How do business leaders continually get sucked into to purchasing dying assets by the bloody bankers!!!

It's called protecting shareholders interests:mad ;:

[LoungeLizzard]

Here we go again. 7% off SP at a stroke. Way to go SKY.

[bottomfeeder]

Here we go again. 7% off SP at a stroke. Way to go SKY.

A bit more and it looks like a buy. Anything less than $2.25

So far $40 million wiped off market cap. We don't know the price for Media works yet. Maybe bottom dollar.

[LoungeLizzard]

A bit more and it looks like a buy. Anything less than $2.25

Yeah, might be good for traders. Not if you're trying to re-build the image of the company.

[jimdog31]

WHen we vote on this debarcle can we also call a vote of no confidence in our non resident chairman?

[cyclist]

WHen we vote on this debarcle can we also call a vote of no confidence in our non resident chairman?

Yep. Need to do a NTL on him ...

[mistaTea]

A bit more and it looks like a buy. Anything less than $2.25

So far $40 million wiped off market cap. We don't know the price for Media works yet. Maybe bottom dollar.

We do need to see the terms of the deal, but if it comes with the $100M of debt then there is no scenario where we get this company for 'bottom dollar'.

[shazam]

https://www.stuff.co.nz/business/128879209/sky-tv-shares-slump-after-it-confirms-talks-to-acquire-mediaworks


Some Sky investors on share market forum Sharetrader reacted with indifference and others with hostility to the announcement.
“Are they looking at Video-Ezy too?,” one quipped.

lol

[mistaTea]

WHen we vote on this debarcle can we also call a vote of no confidence in our non resident chairman?

If they end up blowing the entire cash balance ($150M+) on this deal it would be devastating. Even if they could buy all the assets for $50M and assume the $100M debt, it would be a very expensive deal.

The market has voted very swiftly too - Sophie should kill this deal asap. Though we haven't seen the terms yet...and knowing the terms would give us a better idea of what they are looking to do...it is hard to imaging Sky shareholders coming out the other side of this better off than the sellers.

I maintain that Sky TV's future is as a telco - not owining a radio station and some billboards.

Philip 'the Pooman' Bowman absolutely needs to resign, and so does old school Keith and Joan who no doubt think this transaction is a brilliant idea.

But we also have to question Sophie's capital allocation skills. She was good at cutting costs (with the help of the Foxtel guy)...but let's not forget that Sophie was the one who brought the RugbyPass deal to Martin and sold him on it...

Now this...hmmn.

Kill the deal, and do what the market showed support for - sell the business.

[jimdog31]

In more positive news, the new SP trajectory puts them back as an attractive takeover target. FFS Sky, give it up, noone believes in your ability

[Sideshow Bob]

Add to the cost the $33m wiped off the market cap in the last half hour.

Shows what the market thinks of it.....:t_down:

[jimdog31]

This is also a major distraction from the non-delivery of the STB. Sure, there has been chip shortages, but if they cant even deliver on their core business strategy how the flip will the deliver on unfamiliar business units?

[snigmac]

Low volumes traded currently. I'm still of the opinion thar if Sky can purchase the company for peanuts, this could be a worthwhile venture. Will be interesting to see if Sky moves forward with his and the terms if Sky moves forward with this.

[jimdog31]

Low volumes traded currently. I'm still of the opinion thar if Sky can purchase the company for peanuts, this could be a worthwhile venture. Will be interesting to see if Sky moves forward with his and the terms if Sky moves forward with this.

Yes, sell side is stacked though. Buy side, not so much

[mistaTea]

Low volumes traded currently. I'm still of the opinion thar if Sky can purchase the company for peanuts, this could be a worthwhile venture. Will be interesting to see if Sky moves forward with his and the terms if Sky moves forward with this.

Well, yes very true.

But let's imagine that they gave us the assets for free...and all we had to do was take on the debt. So we got the business for $100M...

Would anyone think that is a great deal? Maybe that deal would be 'ok'...but not exceptional.

And of course, we won't get the assets for free...we will have to pay something plus take the debt no doubt. So even if we got the assets for $50M + $100M debt...if they clear the entire debt, there goes the dividend that a lot of people seem to be hanging out for.

In that scenario to keep the dividend, they would only be able to retire half of the debt. Not ridiculous for a $1B revenue business to have some debt, but our Board are very conservative.

So yes, ultimately we do have to wait and see what the terms are if this ends up being a firm deal...but gosh it is hard to see how this turns out to be a stellar decision for SKT shareholders.

They just keep kicking us in the guts. But don't worry, they are very nice this time...they won't ask us to contribute more money or be diluted to oblivion again! Really looking out for our best interests this lot!

[LoungeLizzard]

Why oh why did I think that SKY had changed? Just as they seem to have steadied the ship they go sailing off into unchartered waters, with a high chance of ending back onto the rocks.

If this goes through it will eat considerably into the warchest of money that could have been used to expand broadband/streaming/mobile ie the future. Instead Pooman and co think that radio and billboards are the future? Does the fact that that business is failing not tell them they should steer clear? What a disaster.

My concern is that they may have sounded out Institutional Investors before they approached NZME - they'd be foolish not to - in which case they might have the numbers. Either way this is going to suck time, energy and money out of the company at a time when they needed to protect their core business and not be trying to find synergies with last century companies. They'll be buying a network of town-criers next:mad ;:

[jimdog31]

Why oh why did I think that SKY had changed? Just as they seem to have steadied the ship they go sailing off into unchartered waters, with a high chance of ending back onto the rocks.

If this goes through it will eat considerably into the warchest of money that could have been used to expand broadband/streaming/mobile ie the future. Instead Pooman and co think that radio and billboards are the future? Does the fact that that business is failing not tell them they should steer clear? What a disaster.

My concern is that they may have sounded out Institutional Investors before they approached NZME - they'd be foolish not to - in which case they might have the numbers. Either way this is going to suck time, energy and money out of the company at a time when they needed to protect their core business and not be trying to find synergies with last century companies. They'll be buying a network of town-criers next:mad ;:

Nah, my money is on the Warriors.

[mistaTea]

Why oh why did I think that SKY had changed? Just as they seem to have steadied the ship they go sailing off into unchartered waters, with a high chance of ending back onto the rocks.

If this goes through it will eat considerably into the warchest of money that could have been used to expand broadband/streaming/mobile ie the future. Instead Pooman and co think that radio and billboards are the future? Does the fact that that business is failing not tell them they should steer clear? What a disaster.

My concern is that they may have sounded out Institutional Investors before they approached NZME - they'd be foolish not to - in which case they might have the numbers. Either way this is going to suck time, energy and money out of the company at a time when they needed to protect their core business and not be trying to find synergies with last century companies. They'll be buying a network of town-criers next:mad ;:

Buy The Rock and a few billboards...or merge with 2D...I know which option I would pick if I genuinely cared about Sky TV as a going concern and not my own interests (keeping my seat on the Board)!

Buying Mediaworks may well bolster revenue somewhat, but it doesn't make our core customers stickier. And it doesn't strengthen our negotiating hand with sports bodies and other content partners...

[Sideshow Bob]

Nah, my money is on the Warriors.

Would rather they bought the town cryers......

[jimdog31]

Would rather they bought the town cryers......

So that definitely means they'll buy the warriors.

[Waltzing]

who would want to buy shares in this broadcasting wave crashing ride into the rocks...

its just not a wave you would want to risk riding...

growth stock? Div stock? no no no...

[snigmac]

I'm going to speculate that if Sky purchases the entity, it will be for 50m-ish and the terms will include taking on the debt. I'm unsure when Mediawork's debt will mature, but I think Sky will have a option to elect to pay debt later and pay a dividend in the near term.

If it plays out that Sky can bolster its revenue by 200m (or even a discounted figure) and generate a profit, we would be looking at a Sky that generates 900m in revenue a year. Couple that with a long maturity on the current debt, we could have a 900m revenue company (that provides a full suite of media services except online news) that pays a dividend this September 2022 still...

There's alot of negatively surrounding the deal, but if the terms are favorable and we can buy the company for peanuts, it could be worth while.

[LoungeLizzard]

I'm going to speculate that if Sky purchases the entity, it will be for 50m-ish and the terms will include taking on the debt. I'm unsure when Mediawork's debt will mature, but I think Sky will have a option to elect to pay debt later and pay a dividend in the near term.

If it plays out that Sky can bolster its revenue buy 200m (or even a discounted figure) and generate a profit, we would be looking at a Sky that generates 900m in revenue a year. Couple that with a long maturity on the current debt, we could have a 900m revenue company (that provides a full suite of media services except online news) that pays a dividend this September 2022 still...

There's alot of negatively surrounding the deal, but if the terms are favorable and we can buy the company for peanuts, it could be worth while.

Paying $150m (including debt) is not peanuts. And this is a company making a loss and is cash flow negative. In the meantime SKY takes it's eye of the ball and may struggle to compete for content because it has emptied its war-chest. And shareholders will not see a dividend for years. Then, mark my words, there will be another cap raise that will dilute shares and tank the SP. And we'll be back where we started from and all the good work since Sophie took over will have been undone. Yeah, you could say I'm negative.

[freebee]

What happened to KKR ?

[Waltzing]

Just as they have got themselves off the rocks and with some cash in the bank they decide to go off and start buying before they even have the current strategy cemented into place.

it nuts... madness...

they need to have a plan to defend themselves buying old tech isnt it...in fact they have a limited future.

just look at the interim consolidated cash statement.

the cash champagne moment has gone to their sensory organs.

TV's are a technology heading into its sunset time line..

its the next decade they need to be worried about the 2030's.

[Mel]

I'm going to speculate that if Sky purchases the entity, it will be for 50m-ish and the terms will include taking on the debt. I'm unsure when Mediawork's debt will mature, but I think Sky will have a option to elect to pay debt later and pay a dividend in the near term.

If it plays out that Sky can bolster its revenue by 200m (or even a discounted figure) and generate a profit, we would be looking at a Sky that generates 900m in revenue a year. Couple that with a long maturity on the current debt, we could have a 900m revenue company (that provides a full suite of media services except online news) that pays a dividend this September 2022 still...

There's alot of negatively surrounding the deal, but if the terms are favorable and we can buy the company for peanuts, it could be worth while.
If you pay peanuts, you get....
Sorry, there's too much of a 'legacy' perspective on this potential acquisition and much better use of their capital available.

[snigmac]

Another angle is that this will be a career defining moment for Sophie and her team. If this doesn't turn out well (assuming a purchase is made), imagine the grief they would get when looking for new roles.

[mistaTea]

Another angle is that this will be a career defining moment for Sophie and her team. If this doesn't turn out well (assuming a purchase is made), imagine the grief they would get when looking for new roles.

I expect a deal to be announced very soon (within days).

They are expecting us to vote on it at an exceptional meeting…so to get that in before we would have the AGM in August they need to get the deal before us pretty quickly…

[Balance]

I expect a deal to be announced very soon (within days).

They are expecting us to vote on it at an exceptional meeting…so to get that in before we would have put AGM in August they need to get the deal before us pretty quickly…

A meeting can be called anytime, doesn’t have to be at the ASM?

[Sideshow Bob]

Sky TV shares slump after it confirms talks to acquire MediaWorks | Stuff.co.nz (https://www.stuff.co.nz/business/128879209/sky-tv-shares-slump-after-it-confirms-talks-to-acquire-mediaworks)

At least they admit to reading Sharetrader!!

[winner69]

If you haven't already done so the Mediaworks financials are interesting reading (Outfits run by PE outfits are always interesting)

Book Value (Equity) is $266m which includes $300m of Intangibles - of which $232m is Goodwill

Note 14 is very interesting - the bit where they say that the Goodwill is actually worth that $232m .... Mediaworks Radio $168m and Outdoor $72m

https://app.companiesoffice.govt.nz/companies/app/service/services/documents/88171D16EA52B565989962C1A0111E86

[Watchful]

So a company in the business of selling largely ad-free content to premium subscribers, buys… an advertising business?

[mistaTea]

A meeting can be called anytime, doesn’t have to be at the ASM?

Yes absolutely that is what I mean.

An Exceptional Meeting would be before our AGM in August.

So, if we were to have a special meeting to vote on this deal in July (for example) they would need to get a deal in front of us very soon.

If they present a deal that requires us to pay any more than $50M cash (given we would be inheriting to much debt) I think the deal will get voted down convincingly. Above a $50M offer they are just squandering our cash and most would rather a tax free payment.

Rather give me my money and let me waste it on the 3 P's (piss, pokies and poontang) thanks!

[winner69]

Yes absolutely that is what I mean.

An Exceptional Meeting would be before our AGM in August.

So, if we were to have a special meeting to vote on this deal in July (for example) they would need to get a deal in front of us very soon.

If they present a deal that requires us to pay any more than $50M cash (given we would be inheriting to much debt) I think the deal will get voted down convincingly. Above a $50M offer they are just squandering our cash and most would rather a tax free payment.

Rather give me my money and let me waste it on the 3 P's (piss, pokies and poontang) thanks!

So disillusioned are we .....Seems like you should SELL SELL SELL ...... right now

[mistaTea]

So disillusioned are we .....Seems like you should SELL SELL SELL ...... right now

Is that so I can help you BUY BUY BUY for a cheaper price mate? :t_up:

[Balance]

Are you looking for a few cheapies balance:t_up:

No point defying the overwhelmingly negative sentiment of Sky doing an acquisition rather than paying out the cash or being taken over.

Let those who want out do so and yes, if it gets cheap enough, happy to add on a few more.

I think that those viewing the potential deal as being only negative are ignoring a number of points which MistaTea has summarized rather well about where Sky can go from here.

[LoungeLizzard]

Is that so I can help you BUY BUY BUY for a cheaper price mate? :t_up:

Yep, as I've said, SKY had only just re-habilitated it's image as a look-ahead, lean, investable company - $40-$50m NP each year, no debt, growth prospects and solid SP base. Now it is back as a stock for chancers trying to earn a quick buck, before everything burns. Depressing beyond words.

[LoungeLizzard]

No point defying the overwhelmingly negative sentiment of Sky doing an acquisition rather than paying out the cash or being taken over.

Let those who want out do so and yes, if it gets cheap enough, happy to add on a few more.

I think that those viewing the potential deal as being only negative are ignoring a number of points which MistaTea has summarized rather well about where Sky can go from here.

I think Ogg, bless him, would have had a few choice gifs to describe the mood...

[mistaTea]

Yep, as I've said, SKY had only just re-habilitated it's image as a look-ahead, lean, investable company - $40-$50m NP each year, no debt, growth prospects and solid SP base. Now it is back as a stock for chancers trying to earn a quick buck, before everything burns. Depressing beyond words.

Given this deal with Mediaworks that is being worked on (and the clarity it brings in that The Board and Management are more interested in job safety than maximising shareholder returns...)

I bet the majority of shareholders would jump at a $3 offer from Private Equity right now (even though it is clearly low ball)

There is just no trust anymore.

[LoungeLizzard]

Given this deal with Mediaworks that is being worked on (and the clarity it brings in that The Board and Management are more interested in job safety than maximising shareholder returns...)

I bet the majority of shareholders would jump at a $3 offer from Private Equity right now (even though it is clearly low ball)

There is just no trust anymore.

We're at $2.45 and the SP will go off a cliff if this deal goes through. So yes, $3 looks pretty good from where I'm sitting (in a padded room, rocking backwards and forwards).

[mistaTea]

We're at $2.45 and the SP will go off a cliff if this deal goes through. So yes, $3 looks pretty good from where I'm sitting (in a padded room, rocking backwards and forwards).

If anything, Sky's actions today will lead to an opportunistic takeover attempt that succeeds (gets enough votes) because nobody has any confidence in The Board/Management being able to do better.

So the very thing they are trying to prevent is probably more likely now.

Shot Pooman!

[Balance]

If anything, Sky's actions today will lead to an opportunistic takeover attempt that succeeds (gets enough votes) because nobody has any confidence in The Board/Management being able to do better.

So the very thing they are trying to prevent is probably more likely now.

Shot Pooman!

Point missed by all the negative reaction is that Sky would not have had its investment bankers approach 2 PE players (one being KKR) just last week if the management and directors are NOT actively considering all options. Which is the right and responsible thing to do.

[mistaTea]

Point missed by all the negative reaction is that Sky would not have had its investment bankers approach 2 PE players (one being KKR) just last week if the management and directors are NOT actively considering all options. Which is the right and responsible thing to do.

But is that even true? Or was the first AFR article just speculative bs?

How can you simultaneously be in the process of selling your business while also being in advanced exclusive talks to make your own acquisition?

[JohnnyTheHorse]

But is that even true? Or was the first AFR article just speculative bs?

How can you simultaneously be in the process of selling your business while also being in advanced exclusive talks to make your own acquisition?

AFR is pretty reliable and the fact Sky refused to comment indicates it's pretty likely. No reason they can't be exploring options to sell the business, whilst at the same time looking for investments if they come up (as a sale isn't a certainty, so can't put life on hold). I'm sure the Mediaworks acquisition would now be a key part of the discussion if they are actually in talks with PE.

If any PE talk is serious then one would expect something imminently, taking advantage of this negative sentiment. Could be a masterstroke leak from PE to save themselves $100m (not saying this with any serious, but you never know... why would the news leak in the first place).

[mistaTea]

AFR is pretty reliable and the fact Sky refused to comment indicates it's pretty likely. No reason they can't be exploring options to sell the business, whilst at the same time looking for investments if they come up (as a sale isn't a certainty, so can't put life on hold). I'm sure the Mediaworks acquisition would now be a key part of the discussion if they are actually in talks with PE.

If any PE talk is serious then one would expect something imminently, taking advantage of this negative sentiment. Could be a masterstroke leak from PE to save themselves $100m (not saying this with any serious, but you never know... why would the news leak in the first place).

Masterstroke indeed. Shareholders that previously might have settled for $3.50 would probably leap at $3 or so now. Just the sad reality.

But the backlash has been pretty strong so hopefully Management have paused for thought.

[Balance]

But is that even true? Or was the first AFR article just speculative bs?

How can you simultaneously be in the process of selling your business while also being in advanced exclusive talks to make your own acquisition?

Street Talk is reputable when it prints such information - that's why it is treated as such in the finance industry.

Pursuing all options - imo that includes inviting takeover offers.

[LoungeLizzard]

Street Talk is reputable when it prints such information - that's why it is treated as such in the finance industry.

Pursuing all options - imo that includes inviting takeover offers.

Pursuing all options? It looks like indecision to me. We've gone from implying the there would be some sort of return to shareholders to trying to sell the business and now throwing good money at the business equivalent of damaged goods. In the meantime the Board has trashed shareholders confidence and revealed themselves to be just as out of touch and backwards looking as the last Board. There simply isn't any positives for shareholders in continually being blind-sided and not knowing from one month to the next where the company is going.

[mistaTea]

Pursuing all options? It looks like indecision to me. We've gone from implying the there would be some sort of return to shareholders to trying to sell the business and now throwing good money at the business equivalent of damaged goods. In the meantime the Board has trashed shareholders confidence and revealed themselves to be just as out of touch and backwards looking as the last Board. There simply isn't any positives for shareholders in continually being blind-sided and not knowing from one month to the next where the company is going.

https://www.nbr.co.nz/market-watchers-surprised-by-sky-sizing-up-mediaworks/

[winner69]

https://www.nbr.co.nz/market-watchers-surprised-by-sky-sizing-up-mediaworks/

Great story .... Sophie is a has been - Tova now the queen of Sky

Tova worth $50m?

[Balance]

Pursuing all options? It looks like indecision to me. We've gone from implying the there would be some sort of return to shareholders to trying to sell the business and now throwing good money at the business equivalent of damaged goods. In the meantime the Board has trashed shareholders confidence and revealed themselves to be just as out of touch and backwards looking as the last Board. There simply isn't any positives for shareholders in continually being blind-sided and not knowing from one month to the next where the company is going.

The company has always said it is pursuing options while improving the underlying dynamics of the business.

It's ST and the media which have speculated on and implied various options.

[mistaTea]

The company has always said it is pursuing options while improving the underlying dynamics of the business.

It's ST and the media which have speculated on and implied various options.

With a little luck we will never find out what the Mediaworks asking price was because commonsense will have prevailed and Sophie will kill the deal.

[Balance]

With a little luck we will never find out what the Mediaworks asking price was because commonsense will have prevailed and Sophie will kill the deal.

Sophie does have skin in the game - she did buy shares in Sky with cash.

[moimoi]

Can anyone point to successful examples of listed companies buying businesses from Private Equity without any price discovery process, in say, the last 20 years….?

[Baa_Baa]

Morning Star have been quick to move on this, update posted on ASB Sec today:

"From Frying Pan to Fire as Sky Eyes Mediaworks?


We are perplexed by Sky Network Television's interest in buying MediaWorks' radio and outdoor advertising businesses in New Zealand.

First, an acquisition of this scale (we guesstimate NZD 150 million-NZD 200 million) is not what we had in mind when management said it's "assessing opportunities to invest capital" now that the balance sheet is back in pristine shape (NZD 130 million in net cash). MediaWorks' units will certainly "generate new revenues", but whether traditional, cyclical radio and outdoor advertising can "accelerate Sky's growth and improve returns for its shareholders" is highly debatable. In the five years to 2019 (that is, prepandemic), the radio advertising market posted CAGR of zero to NZD 281 million. Outdoor advertising posted CAGR of 16% but the entire market is currently worth only around NZD 160 million.

Second, we do not see Sky as a natural owner and operator of radio or outdoor advertising assets. Management is already grappling with increasingly mobile video subscribers who are untethering from Sky's legacy set top boxes and have caused much structural angst over the past few years. It is heroic that management is now willing to take on the additional challenges of chasing mobile eyeballs and fickle ears in traditional media. Sky should already be aware of the tricky task, given its own falling advertising revenue, which ended fiscal 2021 at NZD 45 million (or NZD 52 million pre-COVID-19 fiscal 2019), from NZD 74 million five years ago.

We retain our NZD 3.00 fair value estimate (AUD 2.80) on no moat-rated Sky, given the fluid circumstances. In fact, management is doing due diligence on MediaWorks' advertising units, at a time when the media report talk is rife that private equity is circling Sky itself. As such, we make no changes to our intrinsic assessment for Sky, pending the decision on the acquisition and details on MediaWorks' earnings history and agreed price."

[nztx]

I'm reading this as private equity trying to bundle up both under one in SKT

PE getting rid of it's MW interests always was going to be a hard deal anyway..
What better way than to get their hands on SKT Cash & retain an interest for a while
in combined job before trying to exit that as well when the price looks right ?

Hard to get excited about SKT as any Cap Return or future Dividends might be in question
if things don't go well, if not already

Not a holder but watching from high above..

[LoungeLizzard]

The company has always said it is pursuing options while improving the underlying dynamics of the business.

It's ST and the media which have speculated on and implied various options.

Nope - It was Sky itself that talked about returning capital. Then it was Sky that invited offers for the business. And now Sky is looking to acquire. The media and ST have just been playing catchup and trying to make sense of it all.

Regardless - the market and business analysts are very negative about this latest turn of events. SKY only has itself to blame and hopefully even POOman and Co will see the damage it will cause - reputational and financial - if this goes through.

[mistaTea]

Nope - It was Sky itself that talked about returning capital. Then it was Sky that invited offers for the business. And now Sky is looking to acquire. The media and ST have just been playing catchup and trying to make sense of it all.

Regardless - the market and business analysts are very negative about this latest turn of events. SKY only has itself to blame and hopefully even POOman and Co will see the damage it will cause - reputational and financial - if this goes through.

Pooman too busy enjoying summer in the UK to give a damn.

I have been saying for some time that he has to go. This is the final nail in the coffin I reckon.

Sure, we still don't have the details of the deal yet...but we do know a fair bit already.

And let's face it, given Mediaworks comes with over $100M of debt, the price to buy couldn't be cheap enough to justify the total expense. Even if they gave the business for free and we just took on the debt I would be very sceptical that the $100M pricetag was good deal.

Maybe if Oaktree paid us to take it off their hands we might have a deal.

On what planet is Pooman, Joan of Arc et al going to get one over in Oaktree? It just isn't going to happen.

[nztx]

Pooman too busy enjoying summer in the UK to give a damn.

I have been saying for some time that he has to go. This is the final nail in the coffin I reckon.

Sure, we still don't have the details of the deal yet...but we do know a fair bit already.

And let's face it, given Mediaworks comes with over $100M of debt, the price to buy couldn't be cheap enough to justify the total expense. Even if they gave the business for free and we just took on the debt I would be very sceptical that the $100M pricetag was good deal.

Maybe if Oaktree paid us to take it off their hands we might have a deal.

On what planet is Pooman, Joan of Arc et al going to get one over in Oaktree? It just isn't going to happen.


That's good point - Oaktree have 100 million reasons to want to quit MW into something that looks even
a little bit better and there isn't a long queue of viable suitors wanting to step up to the plate.

Even if SKT was paid very handsomely to take MW into the fold, how would stakeholders take to
sacrificing their Cap Return & possible Div Streams going forward from SKT on it's own ahead
- in return for adding what may be considered in some parts as a problematic Lemon to the fold ? ;)

How long have Private Equity been trying to rid themselves of MediaWorks as a whole
or more recently in bits jettisoned off the side to any willing suitor fronting while MW
has continued pumping out patchy if not red ink clouds ?

The trail of losses to date must be considerable with probably further that should be
recognised in over impairments by PE who have basically got their fingers badly burnt :)

[mistaTea]

That's good point - Oaktree have 100 million reasons to want to quit MW into something that looks even
a little bit better and there isn't a long queue of viable suitors wanting to step up to the plate.

Even if SKT was paid very handsomely to take MW into the fold, how would stakeholders take to
sacrificing their Cap Return & possible Div Streams going forward from SKT on it's own ahead
- in return for adding what may be considered in some parts as a problematic Lemon to the fold ? ;)

How long have Private Equity been trying to rid themselves of MediaWorks as a whole
or more recently in bits jettisoned off the side to any willing suitor fronting while MW
has continued pumping out patchy if not red ink clouds ?

The trail of losses to date must be considerable with probably further that should be
recognised in over impairments by PE who have basically got their fingers badly burnt :)

If TV and Mediaworks is such a match made in Heaven then why didn't it work out with TV3?

Hmmmn.

[Rustycage]

I have grave concerns in trying to outsmart PE, especially a known distressed credit/s***co investor (Oaktree) trying to sell their asset to us.

PE doesn’t have a habit of selling something to watch it 2x afterwards. They have a habit of selling stuff when it looks its rosiest: if MW currently looks rosy, what’s it look like when it’s bad?

This deal doesn’t seem like a better use of capital than giving it to me, seeking a merger to protect the future of the business or just selling the business because you’re out of ideas. Mgmt are welcome to try to sell us on this idea, but I’m very doubtful my position will change

[nztx]

Look at it this way - long suffering Stakeholders have fronted with extra Cash, suffered consolidation
to reach the eve of possible Cap Return and reinstatement of dividends, with things restored somewhere
better near to an even keel.

It maybe hopeful but Sophie should consider taking an experienced Corporate Undertaker with her
to nail Oaktree to wall on heavily knocked down pricing, if being looked at, at all :)

Hopefully the consideration directly hinged to MediaWork's performance over the next 10 years
up from a knocked down Basement buy Liquidator's inventory price :)

The same rules as Private Equity play by - isn't it ? ;) Can't win them all after all :)

That might be better than a Liquidator or Receiver may return to Oaktree any day of the week :)

I agree with Rustycage .. PE will have it's eye on SKT's cash pile (Stakeholder's Ca$h) to save PE
having to wear paying off the MW Loans .. and then maybe an Equity interest possibly, so they can ride
out on the distant horizon with a gain cashed up out of the job when next opportunity presents itself to
quit as the next chapter unfolds, they'll be hoping :)

A bundle of Radio Stations doesn't look a smart addition unless it can be seen to magically enhance SKY's
business, but as MistaTea states .. it's been done before with unimpressive outcome, so it comes down
to price .. A Pile driver comes to mind to determine if anything worthwhile is lurking underneath :)

Who knows - if Oaktree are eager enough to depart, a few cents in the dollar may reward their unrelenting
patience in sticking with Mediaworks through thick and thin, hoping to spot a rainbow in the distant Sky :)

Am I wrong ? :)

[jimdog31]

I have grave concerns in trying to outsmart PE, especially a known distressed credit/s***co investor (Oaktree) trying to sell their asset to us.

PE doesn’t have a habit of selling something to watch it 2x afterwards. They have a habit of selling stuff when it looks its rosiest: if MW currently looks rosy, what’s it look like when it’s bad?

This deal doesn’t seem like a better use of capital than giving it to me, seeking a merger to protect the future of the business or just selling the business because you’re out of ideas. Mgmt are welcome to try to sell us on this idea, but I’m very doubtful my position will change

THIS YEARS FIGURES;

How much $$ has cindy spent on the covid 19 response propping up the revenue for Mediaworks in last 12 months?

NEXT YEARS FIGURES;

What is the the least collectable Debt during a recession? the advertising bill from a small business who signed up to radio thinking it would lift sales (it doesn't)

[Balance]

https://www.stuff.co.nz/business/opinion-analysis/128884770/sky-takeover-of-mediaworks-would-rule-out-merger-with-nzme

Message is pretty clear to Sky directors and management.

[jimdog31]

https://www.stuff.co.nz/business/opinion-analysis/128884770/sky-takeover-of-mediaworks-would-rule-out-merger-with-nzme

Message is pretty clear to Sky directors and management.

Do they read the room and can it? cindy captains call style

Or plough into anyway? like mahuta with three waters

[Balance]

Do they read the room and can it? cindy captains call style

Or plough into anyway? like mahuta with three waters

I would say like Mahuta 😰

[Baa_Baa]

https://www.stuff.co.nz/business/opinion-analysis/128884770/sky-takeover-of-mediaworks-would-rule-out-merger-with-nzme

Message is pretty clear to Sky directors and management.

Beggars belief really, none of the ... take over Sky, or Sky takeover something else is in the Strategy. None of it. Media speculate about a Sky takeover - "we don't respond to speculation". Media speculate about Sky taking over MediaWorks - "oh yeah, sorry, forgot to tell you we have exclusive negotiations with a vulture PE who can't unload it anywhere else". Let alone that MediaWorks looks like a terrible acquisition.

FFS, none of this in is the Strategy and the Board are shooting themselves in the foot. And if the Board haven't overtly sanctioned this, then the management have gone feral. Either way, it's really bad optics.

I've said it before in reply to the enthusiast chatter about selling the company, NONE of it is in the turnaround strategy. Some of us bought into the turnaround Strategy, why the heck don't they just pursue that, make a success of it, and then entertain sale or buyouts if they must. Some respond with the company will never be worth blah blah etc, but they forget we're already up 100% from the lows, even now after the market slammed us today. The turnaround is happening, it's working, shareholder confidence was rising, things were looking good, the future was mapped out and we bought into it.

Then this happened. Like, 'oh that strategy', you mean the one before we got ahead of ourselves and started taking Jardens seriously, like we either have no future and want to sell, or we're so desperate we'll squander shareholder earnings to buy some dog that PE can't sell anywhere else.

"Looking to maximise shareholder returns" is not an adequate or plausible excuse for entertaining anything outside of core strategy, to get this company back on it's feet and rewarding loyal shareholders. The duplicity in their comms to shareholders is appalling, it should not take the media to surface admissions of acquisitions, either way. They should mea culpa, say ooops sorry to shareholders, and get back to business. Dividends coming and a share buyback to sweeten the deal.

Focus on the prize, it is not about selling the company or buying anything else right now. It is about executing the turnaround strategy and re-securing the dominant content aggregator position and media distribution company in New Zealand, end of.

From the article that Balance linked by Tom Pullar-Strecker
"There are a few ways in which Sky’s board could justify a takeover of MediaWorks, but unless it is part of a grander plan about which shareholders have yet to be appraised, none of them could be described as remotely strategic."

"Its board might do better to focus on re-establishing its credibility by returning the company to the position of paying dividends to shareholders, before it started writing cheques to others.If its directors don’t see any need to do that, that could call into question their judgment, which would of course be a separate worry for investors."

[Poet]

Well said baa baa

[Mel]

Beggars belief really, none of the ... take over Sky, or Sky takeover something else is in the Strategy. None of it. Media speculate about a Sky takeover - "we don't respond to speculation". Media speculate about Sky taking over MediaWorks - "oh yeah, sorry, forgot to tell you we have exclusive negotiations with a vulture PE who can't unload it anywhere else". Let alone that MediaWorks looks like a terrible acquisition.

FFS, none of this in is the Strategy and the Board are shooting themselves in the foot. And if the Board haven't overtly sanctioned this, then the management have gone feral. Either way, it's really bad optics.

I've said it before in reply to the enthusiast chatter about selling the company, NONE of it is in the turnaround strategy. Some of us bought into the turnaround Strategy, why the heck don't they just pursue that, make a success of it, and then entertain sale or buyouts if they must. Some respond with the company will never be worth blah blah etc, but they forget we're already up 100% from the lows, even now after the market slammed us today. The turnaround is happening, it's working, shareholder confidence was rising, things were looking good, the future was mapped out and we bought into it.

Then this happened. Like, 'oh that strategy', you mean the one before we got ahead of ourselves and started taking Jardens seriously, like we either have no future and want to sell, or we're so desperate we'll squander shareholder earnings to buy some dog that PE can't sell anywhere else.

"Looking to maximise shareholder returns" is not an adequate or plausible excuse for entertaining anything outside of core strategy, to get this company back on it's feet and rewarding loyal shareholders. The duplicity in their comms to shareholders is appalling, it should not take the media to surface admissions of acquisitions, either way. They should mea culpa, say ooops sorry to shareholders, and get back to business. Dividends coming and a share buyback to sweeten the deal.

Focus on the prize, it is not about selling the company or buying anything else right now. It is about executing the turnaround strategy and re-securing the dominant content aggregator position and media distribution company in New Zealand, end of.

From the article that Balance linked by Tom Pullar-Strecker
"There are a few ways in which Sky’s board could justify a takeover of MediaWorks, but unless it is part of a grander plan about which shareholders have yet to be appraised, none of them could be described as remotely strategic."

"Its board might do better to focus on re-establishing its credibility by returning the company to the position of paying dividends to shareholders, before it started writing cheques to others.If its directors don’t see any need to do that, that could call into question their judgment, which would of course be a separate worry for investors."
Yes, excellent synposis on the desired approach for Sky.

[mistaTea]

Beggars belief really, none of the ... take over Sky, or Sky takeover something else is in the Strategy. None of it. Media speculate about a Sky takeover - "we don't respond to speculation". Media speculate about Sky taking over MediaWorks - "oh yeah, sorry, forgot to tell you we have exclusive negotiations with a vulture PE who can't unload it anywhere else". Let alone that MediaWorks looks like a terrible acquisition.

FFS, none of this in is the Strategy and the Board are shooting themselves in the foot. And if the Board haven't overtly sanctioned this, then the management have gone feral. Either way, it's really bad optics.

I've said it before in reply to the enthusiast chatter about selling the company, NONE of it is in the turnaround strategy. Some of us bought into the turnaround Strategy, why the heck don't they just pursue that, make a success of it, and then entertain sale or buyouts if they must. Some respond with the company will never be worth blah blah etc, but they forget we're already up 100% from the lows, even now after the market slammed us today. The turnaround is happening, it's working, shareholder confidence was rising, things were looking good, the future was mapped out and we bought into it.

Then this happened. Like, 'oh that strategy', you mean the one before we got ahead of ourselves and started taking Jardens seriously, like we either have no future and want to sell, or we're so desperate we'll squander shareholder earnings to buy some dog that PE can't sell anywhere else.

"Looking to maximise shareholder returns" is not an adequate or plausible excuse for entertaining anything outside of core strategy, to get this company back on it's feet and rewarding loyal shareholders. The duplicity in their comms to shareholders is appalling, it should not take the media to surface admissions of acquisitions, either way. They should mea culpa, say ooops sorry to shareholders, and get back to business. Dividends coming and a share buyback to sweeten the deal.

Focus on the prize, it is not about selling the company or buying anything else right now. It is about executing the turnaround strategy and re-securing the dominant content aggregator position and media distribution company in New Zealand, end of.

From the article that Balance linked by Tom Pullar-Strecker
"There are a few ways in which Sky’s board could justify a takeover of MediaWorks, but unless it is part of a grander plan about which shareholders have yet to be appraised, none of them could be described as remotely strategic."

"Its board might do better to focus on re-establishing its credibility by returning the company to the position of paying dividends to shareholders, before it started writing cheques to others.If its directors don’t see any need to do that, that could call into question their judgment, which would of course be a separate worry for investors."

A sentiment shared by many.

The backlash to this lunatic idea has been swift and decisive.

If SM doesn’t kill this deal ASAP she is going to cause more damage to Sky’s reputation as well as her own personal brand.

MW is a non-starter. They couldn’t get it cheap enough to make it make sense.

The way forward is simple, though they seem to want to make it complicated.

1. Find a buyer; or
2. If (1) is not possible then do a capital return and generous dividend to get the SP up above $3. Then do a merger with NZME.

I see far more synergies with NZME (which is a profitable business with no debt). Streaming select sky content on their digital platforms will be a hook to get more subs and also is a form of great advertising for sky to lure those customers into taking a STB, NEON or Sky Sport NOW.

Kill the MW deal (nobody buys the benefits/synergies) and then pick 1 or 2.

[Arbroath]

A sentiment shared by many.

The backlash to this lunatic idea has been swift and decisive.

If SM doesn’t kill this deal ASAP she is going to cause more damage to Sky’s reputation as well as her own personal brand.

MW is a non-starter. They couldn’t get it cheap enough to make it make sense.

The way forward is simple, though they seem to want to make it complicated.

1. Find a buyer; or
2. If (1) is not possible then do a capital return and generous dividend to get the SP up above $3. Then do a merger with NZME.

I see far more synergies with NZME (which is a profitable business with no debt). Streaming select sky content on their digital platforms will be a hook to get more subs and also is a form of great advertising for sky to lure those customers into taking a STB, NEON or Sky Sport NOW.

Kill the MW deal (nobody buys the benefits/synergies) and then pick 1 or 2.

I’m praying this is a tactic to smoke out a decent PE offer for Sky before the Board sabotage the clear value here. This deal looks ****e whatever way I try and rationalise it.

[mistaTea]

I’m praying this is a tactic to smoke out a decent PE offer for Sky before the Board sabotage the clear value here. This deal looks ****e whatever way I try and rationalise it.

They are playing a very dangerous game of chicken with our money if that were the case.

If their intention was to plump up the SP more with news of this potential acquisition to help negotiate a better sale price for Sky then that has backfired spectacularly.

[LoungeLizzard]

Beggars belief really, none of the ... take over Sky, or Sky takeover something else is in the Strategy. None of it. Media speculate about a Sky takeover - "we don't respond to speculation". Media speculate about Sky taking over MediaWorks - "oh yeah, sorry, forgot to tell you we have exclusive negotiations with a vulture PE who can't unload it anywhere else". Let alone that MediaWorks looks like a terrible acquisition.

FFS, none of this in is the Strategy and the Board are shooting themselves in the foot. And if the Board haven't overtly sanctioned this, then the management have gone feral. Either way, it's really bad optics.

I've said it before in reply to the enthusiast chatter about selling the company, NONE of it is in the turnaround strategy. Some of us bought into the turnaround Strategy, why the heck don't they just pursue that, make a success of it, and then entertain sale or buyouts if they must. Some respond with the company will never be worth blah blah etc, but they forget we're already up 100% from the lows, even now after the market slammed us today. The turnaround is happening, it's working, shareholder confidence was rising, things were looking good, the future was mapped out and we bought into it.

Then this happened. Like, 'oh that strategy', you mean the one before we got ahead of ourselves and started taking Jardens seriously, like we either have no future and want to sell, or we're so desperate we'll squander shareholder earnings to buy some dog that PE can't sell anywhere else.

"Looking to maximise shareholder returns" is not an adequate or plausible excuse for entertaining anything outside of core strategy, to get this company back on it's feet and rewarding loyal shareholders. The duplicity in their comms to shareholders is appalling, it should not take the media to surface admissions of acquisitions, either way. They should mea culpa, say ooops sorry to shareholders, and get back to business. Dividends coming and a share buyback to sweeten the deal.

Focus on the prize, it is not about selling the company or buying anything else right now. It is about executing the turnaround strategy and re-securing the dominant content aggregator position and media distribution company in New Zealand, end of.

From the article that Balance linked by Tom Pullar-Strecker
"There are a few ways in which Sky’s board could justify a takeover of MediaWorks, but unless it is part of a grander plan about which shareholders have yet to be appraised, none of them could be described as remotely strategic."

"Its board might do better to focus on re-establishing its credibility by returning the company to the position of paying dividends to shareholders, before it started writing cheques to others.If its directors don’t see any need to do that, that could call into question their judgment, which would of course be a separate worry for investors."

Yep, totally agree.
The Board seemed to be very focussed on executing their strategy of reducing costs, reducing churn, increasing streaming revenue and expanding services into broadband and possibly into mobile. The share consolidation has improved EPS no end, and the property sale allows for dividends to recommence whilst still having plenty of funds to grow the business. Share price has responded and shareholders have, for the most part been happy with the transformation. $3 per share with a dividend wasn't that far off.
The talk/wish for a takeover was simply the legacy of not fully trusting SKY management, and as this episode bears out, there was a good reason for that. But, regardless all SKY needed to do was keep the ship steady whilst they continued implementing the above strategy.
So what the hell were they thinking? Did they not have confidence in their own strategy? Or do they think they can outwit PE and gamble everything they have achieved so far? I do hope the negative reaction from shareholders and business analysts will make them think again. They can always say the numbers don't stack up as a face saving excuse and move on. Otherwise, as I've said, the SP will go off a cliff and it will be $2 per share with no prospect of a divy.

[JohnnyTheHorse]

Still very interested in the terms, as it seems to only stack up if it is on extremely favorable terms (e.g. pay us $50m or more to take on the remain debt). Really want to see the rationale. In any case, with the reaction we have seen I suspect Sky lawyers are tonight busy finding the 'out' from due diligence.

[snigmac]

There is always a easy out in a due diligence clause. I have a copy paste I use for everything, which is inserted for my benefit.

I agree though, let's see the terms before we riot.

[Ferg]

FWIW here is some history. This is not the first time MW has been offered to SKT - a previous discussion included TV. However, the owners at the time were laughed out of the room at the ridiculous price expectation.

TV makes more much sense from a synergy perspective than Radio, but that is no longer an option, plus traditional free to air TV is dying anyway due to streaming. A synergy I can see is cross-promotion between the platforms - i.e. promote Sky on Radio and Billboards, and promote Radio and Billboards on Sky in order to grow (or stop losing) topline revenues. It's probably only good for big Sky events/promotions AND if there are unsold slots, not vice versa. I am however sceptical of such a grand strategy, assuming that is one of the major synergies being touted.

Online will be minimal revenues and Radio ratings are over-stated IMO. Operating synergies will be minimal, but there might be the odd savings in sales costs. Keep in mind the average sale value in Radio is relatively low and the commissions are relatively high (think hunter-gatherer reps). Radio have also thrown a lot of money at recruiting talent lately - this will need to translate into "ratings" and topline revenues, and soon.

I also want to forewarn any FA's looking at this to not get sucked into the EBITDA trap. I believe the radio licences expire in 2031 and re-purchasing those can be a VERY expensive exercise if the competition want to bid up the spectrum prices. Intangible costs are real cash outflows at some point.

Lastly, it is hard to know the recent sugar rush for MW given this Government's unbridled enthusiasm for throwing taxpayer money at media outlets - can the last reported revenues be sustained? Although I see profits from Radio have disappeared - they used to be good. All I can see now is debt holders wanting to eliminate their exposure, and PE wanting to rid themselves of a millstone. Bad shareholders appoint bad Boards, and bad Boards appoint bad CEOs, and so on...has nothing changed?

[Sideshow Bob]

Business Desk - Sky and MediaWorks: why it makes sense, why it doesn’t, and who loses out? | BusinessDesk (https://businessdesk.co.nz/article/media/sky-and-mediaworks-why-it-makes-sense-why-it-doesnt-and-who-loses-out) (Paywalled)

[jimdog31]

I had a bad dream last night..... I dreamt that a company I owned a significant amount of sold prime real estate holdings in auckland for $50m and the ability to finance off these buildings for $100m for future growth , and then used this exact amount to end up in the same position except owning a bunch of old world media, with the debt fully utilised

[mistaTea]

https://www.nzherald.co.nz/business/sky-tv-in-talks-to-buy-mediaworks-cam-wallace-in-line-for-payday/DP53NW4WEASGFOXCZPX54FQLNM/

This Cam Wallace fellow must be rubbing his hands together.

Gets to flick off a sh1tty company and walk away with a couple mil $ payday if he has it his way.

Nice. Just not for us.

[jimdog31]

https://www.nzherald.co.nz/business/sky-tv-in-talks-to-buy-mediaworks-cam-wallace-in-line-for-payday/DP53NW4WEASGFOXCZPX54FQLNM/

This Cam Wallace fellow must be rubbing his hands together.

Gets to flick off a sh1tty company and walk away with a couple mil $ payday if he has it his way.

Nice. Just not for us.

If he is able to buy with options 1.5% @ 300,000 , then sky should be only willing to pay $20m

(I know it doesn't work like that)

[mistaTea]

I had a bad dream last night..... I dreamt that a company I owned a significant amount of sold prime real estate holdings in auckland for $50m and the ability to finance off these buildings for $100m for future growth , and then used this exact amount to end up in the same position except owning a bunch of old world media, with the debt fully utilised

Aye, my usual Tuesday night wet dream featuring our CEO and a takeover bid was interrupted with a ghoulish nightmare whereby we were about to waste our money on a questionable asset that had no significant synergies with our core business. It even came with a huge amount of debt too!

I woke up in a cold sweat.

[winner69]

https://www.nzherald.co.nz/business/sky-tv-in-talks-to-buy-mediaworks-cam-wallace-in-line-for-payday/DP53NW4WEASGFOXCZPX54FQLNM/

This Cam Wallace fellow must be rubbing his hands together.

Gets to flick off a sh1tty company and walk away with a couple mil $ payday if he has it his way.

Nice. Just not for us.

Only been there just over a year

Seduced by PE to take the role …knowing it probably short term.

Won’t hang around and his CV will read like ‘helped run an airline for 14 years and ran a few radio stations for 18 months’

[winner69]

How many listen to the radio these days?

[jimdog31]

Only been there just over a year

Seduced by PE to take the role …knowing it probably short term.

Won’t hang around and his CV will read like ‘helped run an airline for 14 years and ran a few radio stations for 18 months’

...... ran a few radio stations for 18 months, basically got my PE owners out of a massive hole stitching another company up with gargage old world assets, Hire me for your next rescue mission"

[alokdhir]

How many listen to the radio these days?

Almost all but don't notice ....

[jimdog31]

Almost all but don't notice ....

Exactly.....

[Sideshow Bob]

How many listen to the radio these days?

BrianFM for the win!! (Which is not part of MediaWorks)

BrianFM ditches all the radio rules and keeps playing what it likes | Stuff.co.nz (https://www.stuff.co.nz/entertainment/music/119148644/brianfm-ditches-all-the-radio-rules-and-keeps-playing-what-it-likes)

[snigmac]

Has Jarden been approached for comment on this? I wonder what their advice was to Sky on the MW transaction...

[jimdog31]

BrianFM for the win!! (Which is not part of MediaWorks)

BrianFM ditches all the radio rules and keeps playing what it likes | Stuff.co.nz (https://www.stuff.co.nz/entertainment/music/119148644/brianfm-ditches-all-the-radio-rules-and-keeps-playing-what-it-likes)

Just goes to show how little barriers to entry are

[bottomfeeder]

If its going to happen, and I am not in favour of it, then as shareholders let's make sure it happens the right way. First and foremost, MW is not in profit so does not deserve a premium price. We don't have to buy it. It should only be bought at rock bottom prices. I am sure the directors will never get it past the shareholders if it looks too expensive.

There will be synergies. Half of MW will be fired. After all you don't need to double up on marketing and advertising sales. There will be room for dual management, so half of the management at MW could go. Programming will be a bust as the totally different type of programming can't be combined. There may be some opportunities for property integration or broadcasting synergies. Radio is probably due for a shakeup to get away from pure music and talk back. Can't stand talk back, with commoners thinking they somehow have extra insights to laud it over the rest of us. To get this past the shareholders, SKY needs to put forward a comprehensive plan. This shareholder approval will not be a rubber stamp, but something we have never seen before. I think it will fail.

[mistaTea]

S&P 500 up on positive inflation news...

SKT.NZ continuing the downward trajectory...

Short of a takeover, the only realistic way Sophie and the team can turn this around is to kill the deal (say whatever they need to say to save face) and announce a capital return and dividend. Our special meeting can be used to vote on returning the $55M to shareholders and they can declare a $35M FY dividend. That still leaves them $60M or so cash in the bank and will abslutely lift our market valuation.

That then gives them options with a better business like NZME if becoming a bigger NZ media play is the way they want to go.

[Joshuatree]

How many listen to the radio these days?

RNZ National as much as I can.Its got everything and it's unbiased unlike many other radio stations and publications etc. 626,000 plus and in creasing (2021 stats).No TalkBack wannabe experts (like on here:). I'm trusting management know more then us and will do the right thing,wouldn't have bought in if I didn't!

[mistaTea]

https://www.nzherald.co.nz/business/jarden-brief-us-indices-trading-higher/7OXMK3GVN74DY7YP6BZ3LHASOQ/

No mention from Jarden about the Sky announcement and crash in SP yesterday.

Too embarrassed perhaps?

[jimdog31]

https://www.nzherald.co.nz/business/jarden-brief-us-indices-trading-higher/7OXMK3GVN74DY7YP6BZ3LHASOQ/

No mention from Jarden about the Sky announcement and crash in SP yesterday.

Too embarrassed perhaps?


Dont you know theres a convenient chinese wall whenever it gets awkward

[snigmac]

I'm surprised Jarden haven't tried to defend the advice they have provided given the market reaction.

Sophie and Co also need to get their heads in the game and make a decision on the MW deal. The 'we are looking at something but it is uncertain to proceed' is a terrible look and provides no clarity while prejudicing the company.

I would expect that Sky will either kill the deal or at least, defend their decision. They have exclusivity currently so there is no reason in my mind that they can't defend their decision and provide terms and rationale. While I do understand that some matters will need to be kept confidential, business case details should be made available.

[jimdog31]

I'm surprised Jarden haven't tried to defend the advice they have provided given the market reaction.

Sophie and Co also need to get their heads in the game and make a decision on the MW deal. The 'we are looking at something but it is uncertain to proceed' is a terrible look and provides no clarity while prejudicing the company.

I would expect that Sky will either kill the deal or at least, defend their decision. They have exclusivity currently so there is no reason in my mind that they can't defend their decision and provide terms and rationale. While I do understand that some matters will need to be kept confidential, business case details should be made available.

I totally agree. If this doesnt happen how long do we get to make an informed decision before a vote? is it 8.30 announcement voting at 11??

[LoungeLizzard]

I'm surprised Jarden haven't tried to defend the advice they have provided given the market reaction.

Sophie and Co also need to get their heads in the game and make a decision on the MW deal. The 'we are looking at something but it is uncertain to proceed' is a terrible look and provides no clarity while prejudicing the company.

I would expect that Sky will either kill the deal or at least, defend their decision. They have exclusivity currently so there is no reason in my mind that they can't defend their decision and provide terms and rationale. While I do understand that some matters will need to be kept confidential, business case details should be made available.

You'd think that, given the fall-out, Sophie and her Communication gurus would break cover and make some sort of statement - it would be the decent and logical thing to do. But that's not how SKY operate - if they can choose the worst option they will do so, and then go to ground. No damage control, certainly no mea culpa's - they just go silent or worse, keep digging.

[JohnnyTheHorse]

Immediately backtracking would have the worst looks. They have seen shareholder reaction (although major holders may have different views), so I suspect they give it till Friday or Monday before announcing they have completed due diligence and it didn't stack up. That way it looks like they had an idea, but were smart enough not to proceed as it didn't quite work. Not 'we think we had a great idea, but folded immediately due to shareholder pressure'.

Also there's absolutely no way Jarden will comment on confidential negotiations, so not sure why people are surprised there's no comment from them.

[RTM]

The sooner they get the cash into shareholders hands the better. Its obviously burning a hole in their pockets.
It's one thing to have a good idea...and then go to the market / shareholders for funding to proceed....
....and quite another to have windfall cash via property sale / cash raise and p**ss that away.

Pleased my buy price was 13.9c an I have not tossed in any more..even tho tempted at times.
Hope they pass on this.

[snigmac]

Jarden could comment on the deal in a overall and indirect sense without commenting on the deal details.

[mistaTea]

Immediately backtracking would have the worst looks. They have seen shareholder reaction (although major holders may have different views), so I suspect they give it till Friday or Monday before announcing they have completed due diligence and it didn't stack up. That way it looks like they had an idea, but were smart enough not to proceed as it didn't quite work. Not 'we think we had a great idea, but folded immediately due to shareholder pressure'.

Also there's absolutely no way Jarden will comment on confidential negotiations, so not sure why people are surprised there's no comment from them.

You are correct Stallion, even if the universally negative feedback so far is a wake up call for them there is no way they say anything for a while.

It would be very arrogant at this point to proceed with this deal if shareholders are required to pay anything for the business, given the very negative sentiment.

The only way I see a MW deal being palatable is if Oaktree & co pay us some money to take the business and the debt. And that aint gonna happen.

And even if it did, it is prbably still a bad idea as it would make it impossible to merge with NZME later (a much better proposition than MW) and would also probably complicate things for a telco merger. So we would own a crappy asset with limited upside yet significantly reduce our options in the future.

No thanks.

[JohnnyTheHorse]

https://businessdesk.co.nz/article/technology/new-2degrees-ready-to-rock-the-boat

2degrees: “... Owning the household wallet is a critical part of our strategy. Bundling is a critical part of our strategy.”

[Muse]

y'all aware SKT had a conference call with analysts yesterday? anyone manage to listen in?

was surprised one was hosted for analysts only but no mention of it to the NZX or made available to shareholders.

doesn't sound like much was disclosed - wouldnt be drawn into much detail, wouldn't comment on synergies, etc, but mentioned mediaworks ~$40m of EBITDA was covid impacted

[mistaTea]

https://businessdesk.co.nz/article/technology/new-2degrees-ready-to-rock-the-boat

2degrees: “... Owning the household wallet is a critical part of our strategy. Bundling is a critical part of our strategy.”


Mark Callander is a very good operator.

Believe me, Sky would me in much safer hands if Sophie reported to him.

[mistaTea]

Not long now before market cap drops below $400M.

Really not making it easy for us to get a good price from PE now.

This will go down in the textbooks as one of the stupidest calls from Management and The Board after so much hard work when the light was at the end of the tunnel...

[mistaTea]

Not long now before market cap drops below $400M.

Really not making it easy for us to get a good price from PE now.

This will go down in the textbooks as one of the stupidest calls from Management and The Board after so much hard work when the light was at the end of the tunnel...


Our EV is currently sitting at around $260M.

Our business is valued at only a touch more than NZME now.

Market will value us less than NZME by the end of the week I bet.

I mean, things couldn't have gone more wrong for these guys.

[LoungeLizzard]

Not long now before market cap drops below $400M.

Really not making it easy for us to get a good price from PE now.

This will go down in the textbooks as one of the stupidest calls from Management and The Board after so much hard work when the light was at the end of the tunnel...

Which is why I still think some sort of statement from the Board, indicating - but not saying - that they acknowledge shareholders concerns and imply that those concerns will be taken into account in making their decision.
Otherwise by the time they make any sort of statement they will have wiped 20% off the SP and value of the company. So - dampen down the fire as best they can for now and put it out completely by giving the thumbs down. And then start the re-building by announcing a return of capital to shareholders and get back to executing their strategy.

[mistaTea]

Which is why I still think some sort of statement from the Board, indicating - but not saying - that they acknowledge shareholders concerns and imply that those concerns will be taken into account in making their decision.
Otherwise by the time they make any sort of statement they will have wiped 20% off the SP and value of the company. So - dampen down the fire as best they can for now and put it out completely by giving the thumbs down. And then start the re-building by announcing a return of capital to shareholders and get back to executing their strategy.

I don't think they will say anything more until they have made a decision.

Best case is they go into a trading halt with a buyout offer. This becomes their cover story for why they didn't proceed. They were in the middle of due dilligence with MW and then someone made an offer too good to refuse...

If that doesn't happen then yes, the sooner they kill this the better. Quickly get onto the capital return and dividend to make amends with shareholders...

[jimdog31]

y'all aware SKT had a conference call with analysts yesterday? anyone manage to listen in?

was surprised one was hosted for analysts only but no mention of it to the NZX or made available to shareholders.

doesn't sound like much was disclosed - wouldnt be drawn into much detail, wouldn't comment on synergies, etc, but mentioned mediaworks ~$40m of EBITDA was covid impacted

What about the positive impact of cindys covid campaigns??? surely offset

[winner69]

Not many acquisitions ever work out to plan if synergies is part of the justification

Common phrase in Boardrooms post acuisition - where did all the synergies go?

[moimoi]

I had a bad dream last night..... I dreamt that a company I owned a significant amount of sold prime real estate holdings in auckland for $50m and the ability to finance off these buildings for $100m for future growth , and then used this exact amount to end up in the same position except owning a bunch of old world media, with the debt fully utilised

And despite being a Broadcaster it sells its outdoor broadcasting arm and buys an outdoor advertising business...lol

Perhaps their going stream the sport to the Billboards. ;-)

[jimdog31]

And despite being a Broadcaster it sells its outdoor broadcasting arm and buys an outdoor advertising business...lol

Perhaps their going stream the sport to the Billboards. ;-)

Flip I forgot about that!!!

They're on a yoyo diet. Slimming down so they can fatten themselves back up.

[winner69]

Director Joan has immense experience in media and radio

She'll see the wool isn't pulled over Sophie's eyes

[jimdog31]

y'all aware SKT had a conference call with analysts yesterday? anyone manage to listen in?

was surprised one was hosted for analysts only but no mention of it to the NZX or made available to shareholders.

doesn't sound like much was disclosed - wouldnt be drawn into much detail, wouldn't comment on synergies, etc, but mentioned mediaworks ~$40m of EBITDA was covid impacted

If a company was covid "impacted" how many of those companies can reasonably expect to be "un-impacted" to the same extent on the other side of covid? this is some of the most challenging times in any business ive encountered in 15 years

[mistaTea]

Director Joan has immense experience in media and radio

She'll see the wool isn't pulled over Sophie's eyes

Mate, Joan Withers looks like a cadaver.

[jimdog31]

Director Joan has immense experience in media and radio

She'll see the wool isn't pulled over Sophie's eyes

For her $100,000 how much does she actually care?

[Poet]

Seems the analysts weren't convinced by their private briefing

Another analyst raises doubts over Sky-MediaWorks deal | Stuff.co.nz (https://www.stuff.co.nz/business/128896154/another-analyst-raises-doubts-over-skymediaworks-deal)

Jeez, Forbar even saying they think the shareholder ratification vote would only be triggered by $220m PLUS Debt.

What a farce, only on the NZX eh?

[Poet]

These corporate geniuses have managed to destroy $80m of sharemaket capitalisation virtually overnight, where will they stop?

[mistaTea]

Seems the analysts weren't convinced by their private briefing

Another analyst raises doubts over Sky-MediaWorks deal | Stuff.co.nz (https://www.stuff.co.nz/business/128896154/another-analyst-raises-doubts-over-skymediaworks-deal)

Jeez, Forbar even saying they think the shareholder ratification vote would only be triggered by $220m PLUS Debt.

What a farce, only on the NZX eh?

$220M takeover price PLUS we get to pay off the debt??

Jesus H Christ.

Everyone on the Board need to resign and we need a new CEO.

If the takeover price is anything more than $0 they won't have shareholder support.

[winner69]

Mate, Joan Withers looks like a cadaver.

Chair of Warehouse as well ..... don't think she buys her clothes from them

[winner69]

The current **** wouldn't be happening if Derek was still around

Bring back Derek

[mistaTea]

Chair of Warehouse as well ..... don't think she buys her clothes from them


LOLLLL! I don't think she has ever set foot inside The Warehouse let alone buy anything​ from them mate...

[jimdog31]

Remember how the article read SKT "emerges" as the buyer.

That would imply there was field of bidders.

I'm pretty sure SKT was the only starter in the race.

[mistaTea]

Remember how the article read SKT "emerges" as the buyer.

That would imply there was field of bidders.

I'm pretty sure SKT was the only starter in the race.

Yeah well when they realised Sky was full of patsies they didn't need to shop around.

[freebee]

From the Stuff article : 'Comment has been sought from Sky TV chairman Philip Bowman on the proposed acquisition.'

His phone must be out of range or turned off

[mistaTea]

From the Stuff article : 'Comment has been sought from Sky TV chairman Philip Bowman on the proposed acquisition.'

His phone must be out of range or turned off

He filled up on Yorkshire pudding last night and is in a deep slumber right now.

[jimdog31]

From the Stuff article : 'Comment has been sought from Sky TV chairman Philip Bowman on the proposed acquisition.'

His phone must be out of range or turned off

Thats cos he's literally asleep half way around the world.

Are there any other NZX listed companies with their chairman not in the country?

Or worse, if there are, Are they also looking to acquire a loss making business to add to their turnaround story?

Or even worse, is there a NZX company that is in takeover territory where the chairman isnt even on the same continent?

[JohnnyTheHorse]

Well I'm bucking trend and have been adding to my position today.

If PE want this, they will strike very soon on this weakness. Dream come true for them.

[mistaTea]

Well I'm bucking trend and have been adding to my position today.

If PE want this, they will strike very soon on this weakness. Dream come true for them.


Aye, PE were always going to get Sky for a great price.

Now they will get Sky for an absolute steal thanks to this lot.

[Old mate]

Looking at all of this it doesn't seem to add up. Does anyone else think there's something else going on here? Stallion might be on to it. Or are the board that outa touch with reality?

[nztx]

Looking at all of this it doesn't seem to add up. Does anyone else think there's something else going on here? Stallion might be on to it. Or are the board that outa touch with reality?


Yeah - PE get the SKT Cash & a large chunk of SKT to get them out of a tight spot quitting a troublesome MW

Very easy to dump a swag of listed SKT shares on the market for the full exit stage right at a good price than trying to rid themselves of troublesome media empire bizzo thats been bleeding red forever & not many would want to touch with a barge pole :)

The current SKT board have probably been told by PE that their seats are safe & Fees will be doubled if they play the game taking in the MW Lemon, while PE have a stockpile of SKT Shares ? Sound like a likely scenario ? ;)

Wonder if Joan can broker a deal to offload the Lemon to Fairfax for $300m or sell it for a buck inclusive
of all the debt out to Stuff ? ;)

[winner69]

Wasn’t Sky TV a $2.7 billion company not that long ago

[nztx]

Wasn’t Sky TV a $2.7 billion company not that long ago



$410m Capitalisation now on NZX page - a mere 15% by looks :)

[Mel]

Aye, PE were always going to get Sky for a great price.

Now they will get Sky for an absolute steal thanks to this lot.
Beyond belief that they would embark on such stupidity - it makes me think there is some strategy to this that we're not privy to. If that's not the case, wake me up as this is a nightmare outcome for Sky shareholders!

[nztx]

How convenient - here's MediaWorks latest Financial Statements filing 1 June 2022 for Y/e 31.12.21

Link is to a pdf on NZ Companies Office site

https://app.companiesoffice.govt.nz/companies/app/service/services/documents/88171D16EA52B565989962C1A0111E86

MEDIAWORKS INVESTMENTS LTD:

Balance Sheet shows they are $300m Gumboot deep in Intangibles ; on net Shareholder Funds of $267m

Losses both years 2021 & 2020


Borrowings $108m $110m (Term & Current) Not much reduction there


Who in their right mind would recommend buying this thing or could see any major enhancement
arising from chucking it into SKT ? ;)

[winner69]

How convenient - here's MediaWorks latest Financial Statements filing 1 June 2022 for Y/e 31.12.21

Link is to a pdf on NZ Companies Office site

https://app.companiesoffice.govt.nz/companies/app/service/services/documents/88171D16EA52B565989962C1A0111E86


Balance Sheet shows they are $300m Gumboot deep in Intangibles ; on net Shareholder Funds of $267m

Losses both years 2021 & 2020


Borrowings $108m $110m (Term & Current) Not much reduction there

As I told you yesterday nztx read Note 14 as to how they justify the goodwill ……growth rates etc.

[nztx]

With slightest of bumps in the road ahead - markets, economy - affecting financial position
& loan servicing going forward - then what are intangibles worth in a firesale situation ?

MPG looks similar - doesn't it - in the balance sheet structuring :)

In fact look at MFB too

Election year next year - Covid wont star much going forwards, bruised bizzo's
events etc etc - a shadow of what was now crawling out of the rubble

How does that bode going forwards for MW or further pain & showers of Red ? ;)

PE badly want to reverse gear out of MW - that sticks out a mile

Why would a CEO be blessed with what came out to go seek deals for a bonus ?

PE want a cleaner nicer looking + more convenient exit arrangement from their Media problem child :)

SKT doesn't need MW - that's for sure

If SKT wait long enough - who knows they may get to pick up further pieces of MW they see
as fitting SKT, as MW hits the rougher sections of the road ahead .. & without wearing MW's
Debt monkey or taking onboard the more onerous or unnecessary bits, but @ knocked down
Liquidation / Receivers Inventory rates :)

[snigmac]

At first glance, MWs FYE statement looks terrible. Is the next step to start protesting outside of Sky's head office?

[nztx]

At first glance, MWs FYE statement looks terrible. Is the next step to start protesting outside of Sky's head office?


And those two years were supposed to be good years for Media, Radio & Papers too

Plenty of Govt feel-good Covid cash washing around

Plenty of Govt prescribed locked up inside days

SKT didn't do too badly out of it though

NZM bounced it's way out of things in same period breaking recent records

Contrast that with what MW produced

And somewhere someone thinks SKT might like to take on MW with a welcome in doormat at a
large price on the house & a barrel full of monkeys on past sins needing settling up for good measure ?

Hillarious - isn't it ? :)

[jimdog31]

And those two years were supposed to be good years for Media, Radio & Papers too

Plenty of Govt feel-good Covid cash washing around

Plenty of Govt prescribed locked up inside days

SKT didn't do too badly out of it though

NZM bounced it's way out of things in same period breaking recent records

Contrast that with what MW produced

And somewhere someone thinks SKT might like to take on MW with a welcome in doormat at a
large price on the house & a barrel full of monkeys on past sins needing settling up for good measure ?

Hillarious - isn't it ? :)

Don't forget the covid "impact" of $40m dollars

I'd argue its a positive impact

[mistaTea]

Initially when the news broke I thought we had better wait to see the terms of the deal before passing final judgement.

But you know what?

I don’t have to smell a fart to know it stinks.

[Poet]

And those two years were supposed to be good years for Media, Radio & Papers too



Hillarious - isn't it ? :)

Laugh? - I thought I'd never start

[nztx]

Don't forget the covid "impact" of $40m dollars

I'd argue its a positive impact


The accounts report Wage Subsidy receipts of $5.26 m in Y/e 31.12.20

[nztx]

In potentially harder inflationary higher cost times ahead, I would say MW's revenues on potentially
reduced and/or less liquid client base is likely to start looking more and more stressed heading
out of Covid, through Elections (other Media see more light)

Out past three or four years, potentially or not a Govt change then what ?
It wont be the same NZ pre 2019 that is around in 2024/25.. by any means or degree.

Have seen it in recent past where certain media advertising formats are first to get knocked on the head
- usually Radio first, then Mags & Papers etc.. through contacts etc.

[bottomfeeder]

Yep with market cap falling any purchase of MW will be a major transaction I am presently preparing my application for compulsory buy out at an agreed price of forbar valuation. I believe its $3.00. Not only will they lose money on the buy of MW, they will have to buy out minority shareholders. We should save any evidence of valuations for our negotiations before the analysts start reducing their valuations

[jimdog31]

yep with market cap falling any purchase of mw will be a major transaction i am presently preparing my application for compulsory buy out at an agreed price of forbar valuation. I believe its $3.00. Not only will they lose money on the buy of mw, they will have to buy out minority shareholders. We should save any evidence of valuations for our negotiations before the analysts start reducing their valuations

tell me more!

[jimdog31]

The accounts report Wage Subsidy receipts of $5.26 m in Y/e 31.12.20

Yes but do the reports show how much money they received for the constant "this is a covid 19 announcement" and "get vacinated" advertising that every media outlet got dished out on a plate?

They wont see that money in any future years.

[bottomfeeder]

tell me more!

Any major transaction that is approved by shareholders triggers a buy out provision by dissenting minority shareholders. It's supposed to go to arbitration. But actually it's much simpler that. Years ago I was a shareholder in Macraes mining. I forget the actual details, but there was a merger, scheme of arrangement, or something g, but it was a major transaction. In the voting booklet it was identified as a major transaction and minority shareholders were advised of their right fir a compulsory buy out. I lodged the claim. Next I had a phone all from the company, then negotiated a buyout over the phone which was above market value by a reasonable amount for me at the time. Next I see the money in my account, I didn't even sign a transfer.

[JohnnyTheHorse]

The good news from all this is management and the board are now probably just sick and tired of this whole thing, so will be more than happy to sell to PE. Won't be the price we wanted, but at least will put it to bed.

[mistaTea]

Any major transaction that is approved by shareholders triggers a buy out provision by dissenting minority shareholders. It's supposed to go to arbitration. But actually it's much simpler that. Years ago I was a shareholder in Macraes mining. I forget the actual details, but there was a merger, scheme of arrangement, or something g, but it was a major transaction. In the voting booklet it was identified as a major transaction and minority shareholders were advised of their right fir a compulsory buy out. I lodged the claim. Next I had a phone all from the company, then negotiated a buyout over the phone which was above market value by a reasonable amount for me at the time. Next I see the money in my account, I didn't even sign a transfer.

Ok I want in on this if this deal goes ahead.

[jimdog31]

Any major transaction that is approved by shareholders triggers a buy out provision by dissenting minority shareholders. It's supposed to go to arbitration. But actually it's much simpler that. Years ago I was a shareholder in Macraes mining. I forget the actual details, but there was a merger, scheme of arrangement, or something g, but it was a major transaction. In the voting booklet it was identified as a major transaction and minority shareholders were advised of their right fir a compulsory buy out. I lodged the claim. Next I had a phone all from the company, then negotiated a buyout over the phone which was above market value by a reasonable amount for me at the time. Next I see the money in my account, I didn't even sign a transfer.

You sir are a champion and a squire. Journos if you are reading this, write about this revolt please.

[mistaTea]

The good news from all this is management and the board are now probably just sick and tired of this whole thing, so will be more than happy to sell to PE. Won't be the price we wanted, but at least will put it to bed.

Yeah we can kiss $4/share goodbye. Would be lucky to get $3.20 the way things are going.

[JohnnyTheHorse]

There's just no way this gets put to shareholder vote, unless we are all wrong and the terms of the deal are very very attractive. Management would essentially just be putting their jobs, and more importantly their reputation, on the line.

[nztx]

Yes but do the reports show how much money they received for the constant "this is a covid 19 announcement" and "get vacinated" advertising that every media outlet got dished out on a plate?

They wont see that money in any future years.

Agreed - that Windfall Govt Covid Revenue will likely not be ongoing to the large degree seen in past

[nztx]

There's just no way this gets put to shareholder vote, unless we are all wrong and the terms of the deal are very very attractive. Management would essentially just be putting their jobs, and more importantly their reputation, on the line.


Do you see possibility of an Offer by PE to take out SKT ?

Perhaps part consideration in SKT shares ?

Without that (ie: PE making a run for SKT's cash) it's either backtrack no deal
or it would have to be put to shareholders, unless I'm missing something..

MW would have to realise that SKT Shareholder vote will be the major hurdle to anything happening

How does SKT share register look now ? Any large piranha funds jumped onboard for a free lunch
or a friendly feast ? ;)

[mistaTea]

There's just no way this gets put to shareholder vote, unless we are all wrong and the terms of the deal are very very attractive. Management would essentially just be putting their jobs, and more importantly their reputation, on the line.

Hard to imagine a scenario that is attractive unless SM announced that they are gifting us the business and we just have to pay down the debt.

Even that would be a bad deal given the ramifications in terms of sky not having the option to merge with NZME or a telco later.

[mistaTea]

PE could buy both Sky and NZME for $900M right now I reckon.

Chump change for a big player like KKR.

A Sky-NZME merged entity backed up with broadband and eventually mobile could be a good little money spinner…

[errornz]

Skys management must be a sucker for punishment. Just as they put one fire out in Sky, they go looking for another fire.

I don't mind if they invest in loss making future growth business's. But radio and billboards.... Come on man. They are going for the holy trinity of legacy media.

As a share holder, this really does p*** me off.

[Stranger_Danger]

Any holder that has posted here and not written to the company is doing themselves and other holders a disservice.

If you believe the acquisition makes no sense on strategic and risk management grounds, I would suggest doing so BEFORE we learn what the proposed price is. You can always make the price point afterwards, but this deal makes no sense regardless of price, and you should tell them that. I'm astonished Oaktree can keep a straight face in negotiations.

[nztx]

Skys management must be a sucker for punishment. Just as they put one fire out in Sky, they go looking for another fire.

I don't mind if they invest in loss making future growth business's. But radio and billboards.... Come on man. They are going for the holy trinity of legacy media.

As a share holder, this really does p*** me off.


You're on to it .. are you interested in a new day job @ SKT HQ ? :)

There seems to be large void there in need of some real good talent ..
at a very high level

[mistaTea]

Those reports about the transaction probably being $220M + in order to require a shareholder vote…

Well, Christ Almighty - NZME is only valued at $245M and they are a much better business.

Why wouldn’t we just merge with them instead? Don’t even need any cash to do it…just a straight share swap.

Still plenty of cash for buybacks and divvys…

And a SKT-NZME entity would be far better than SKT-MW.

The whole thing is just infuriating because it’s so damn stupid.

I’d prefer to get the SP up first with divvys etc and then merge with NZME. But if these arse clowns are going to do something stupid pile buy MW then I would take the NZME merger now instead any day.

[nztx]

There is a slight problem Muriel

Everyone around the negotiating table thinks a large $100m + Loan Liability is an Asset

And a Slightly reduced Loss for last FY means a record Billion Dollar Profit the next year
over the Airwaves and Billboards everywhere.. even those facing down towards the ground

No-one has been able to determine why their rough back of envelope calculations
are wildly out of wack and where the large imbalance is ;)

[jimdog31]

Any holder that has posted here and not written to the company is doing themselves and other holders a disservice.

If you believe the acquisition makes no sense on strategic and risk management grounds, I would suggest doing so BEFORE we learn what the proposed price is. You can always make the price point afterwards, but this deal makes no sense regardless of price, and you should tell them that. I'm astonished Oaktree can keep a straight face in negotiations.

If any shareholders do wish to exercise their rights for a buy back the relevant sections are

section 110
https://www.legislation.govt.nz/act/public/1993/0105/latest/DLM320496.html?search=sw_096be8ed81c295af_buy+out_ 25_se&p=1

section 111
https://www.legislation.govt.nz/act/public/1993/0105/latest/DLM320497.html?search=sw_096be8ed81c295af_buy+out_ 25_se&p=1#DLM320497




investorrelations@sky.co.nz




investorrelations@sky.co.nz

[Poet]

If any shareholders do wish to exercise their rights for a buy back the relevant sections are

section 110
https://www.legislation.govt.nz/act/public/1993/0105/latest/DLM320496.html?search=sw_096be8ed81c295af_buy+out_ 25_se&p=1

section 111
https://www.legislation.govt.nz/act/public/1993/0105/latest/DLM320497.html?search=sw_096be8ed81c295af_buy+out_ 25_se&p=1#DLM320497




investorrelations@sky.co.nz




investorrelations@sky.co.nz




But the company press release says the transaction needs to pass by a simple majority (so just an ordinary resolution, not a special resolution) whereas a major transaction would require 80% under the legislation, presumably then this isn't actually expected to be a major transaction - so why the need for any vote at all - I'm confused, can anybody throw some light here?

[snigmac]

Can someone prepare a template email with [insert name], [value of share held] and etc we can copy paste, fill and email to investorrelations@sky.co.nz ?

[bottomfeeder]

If the board are serious about the purchase, I hope they are not extrapolating profits of cash flows. MW has been losing cash over last five years. 2021 was slightly cash flow positive, so a dunderhead SKT director must see that it follows that within the next five years it will be a gold mine. Have to pay based on the fifth year extrapolation. A real Tui moment.

[bottomfeeder]

Can someone prepare a template email with [insert name], [value of share held] and etc we can copy paste, fill and email to investorrelations@sky.co.nz ?

For the buyout you have to have voted against a successful resolution. Patience.

[errornz]

Those reports about the transaction probably being $220M + in order to require a shareholder vote…

Well, Christ Almighty - NZME is only valued at $245M and they are a much better business.

Why wouldn’t we just merge with them instead? Don’t even need any cash to do it…just a straight share swap.

Still plenty of cash for buybacks and divvys…

And a SKT-NZME entity would be far better than SKT-MW.

The whole thing is just infuriating because it’s so damn stupid.

I’d prefer to get the SP up first with divvys etc and then merge with NZME. But if these arse clowns are going to do something stupid pile buy MW then I would take the NZME merger now instead any day.

This. NZME would be a much better business.

[jimdog31]

But the company press release says the transaction needs to pass by a simple majority (so just an ordinary resolution, not a special resolution) whereas a major transaction would require 80% under the legislation, presumably then this isn't actually expected to be a major transaction - so why the need for any vote at all - I'm confused, can anybody throw some light here?

You could right. It depends on the size of the deal whether its a Major or not. They're saying its not.....

[JohnnyTheHorse]

I believe we may be looking at a reverse takeover of sorts... hear me out.

We can see from financials that it basically isn't a good purchase if we have to pay for it and assume the debt. So why the hell would Sky be looking at it, and saying that it'll need to be voted on by shareholders (indicating the transaction is >50% of market cap). Are management really that stupid to pay a large some for something that doesn't really fit and carries significant risk???

What if Oaktree and Quadrant realise that they cannot get out of their investment without merging with another undervalued company. What if the deal proposed is a merger, with Oaktree/Quadrant paying shareholders for say 51% of the shares and Sky distributing the cash on balance sheet prior to shareholders. Shareholders would need to vote on that.

Sky then becomes a bigger vehicle, that can be further sold in future as it could be a strategic asset for several companies.

[mistaTea]

I believe we may be looking at a reverse takeover of sorts... hear me out.

We can see from financials that it basically isn't a good purchase if we have to pay for it and assume the debt. So why the hell would Sky be looking at it, and saying that it'll need to be voted on by shareholders (indicating the transaction is >50% of market cap). Are management really that stupid to pay a large some for something that doesn't really fit and carries significant risk???

What if Oaktree and Quadrant realise that they cannot get out of their investment without merging with another undervalued company. What if the deal proposed is a merger, with Oaktree/Quadrant paying shareholders for say 51% of the shares and Sky distributing the cash on balance sheet prior to shareholders. Shareholders would need to vote on that.

Sky then becomes a bigger vehicle, that can be further sold in future as it could be a strategic asset for several companies.

But the market announcement was clear that Sky is the acquirer.

[nztx]

I believe we may be looking at a reverse takeover of sorts... hear me out.

We can see from financials that it basically isn't a good purchase if we have to pay for it and assume the debt. So why the hell would Sky be looking at it, and saying that it'll need to be voted on by shareholders (indicating the transaction is >50% of market cap). Are management really that stupid to pay a large some for something that doesn't really fit and carries significant risk???

What if Oaktree and Quadrant realise that they cannot get out of their investment without merging with another undervalued company. What if the deal proposed is a merger, with Oaktree/Quadrant paying shareholders for say 51% of the shares and Sky distributing the cash on balance sheet prior to shareholders. Shareholders would need to vote on that.

Sky then becomes a bigger vehicle, that can be further sold in future as it could be a strategic asset for several companies.


Are a marriage between SKY & Radio Billboards etc likely to get the ComCom tick ?

[JohnnyTheHorse]

But the market announcement was clear that Sky is the acquirer.

Hmm you're right. In that case, the approval by ordinary resolution is likely not something required by listing rules. Instead, it is in there to protect the board by having shareholders vote on the deal. It would also be a condition of any contract before going unconditional.

Essentially if we aren't getting paid for MW (i.e the deal isn't favourable) then we can vote no and the transaction won't proceed. Nothing to worry about, expect potential competence of management.

[mistaTea]

Hmm you're right. In that case, the approval by ordinary resolution is likely not something required by listing rules. Instead, it is in there to protect the board by having shareholders vote on the deal. It would also be a condition of any contract before going unconditional.

Essentially if we aren't getting paid for MW (i.e the deal isn't favourable) then we can vote no and the transaction won't proceed. Nothing to worry about, expect potential competence of management.

Obviously have to see the final deal, but I think they are going to really struggle to get it past a vote, even if they just need 50% + 1 vote.

I control about 330K shares and they will be voting NO.

[bottomfeeder]

Simply Wall Street values SKT at $3-41, and Value Investing at a whopping $4-35. When I go for a minority buyout I am opting for the $4-35 per share. Woohooo. Management just wont let it get to the vote. I am not sure if the buyout is triggered by the successful resolution or after the actual takeover.

[winner69]

But the market announcement was clear that Sky is the acquirer.

Recently Plexure ‘acquired’ Task ……but in reality Task took over Plexure

And Plexure shareholders down the gurgler big time while Task shareholders got a pile of cash

[LaserEyeKiwi]

Remember how the article read SKT "emerges" as the buyer.

That would imply there was field of bidders.

I'm pretty sure SKT was the only starter in the race.

I think there was plenty of chatter about Stuff buying MW to become a fairly similar entity to NZME (radio & online news/newspaper assets and some other advertising operations). Makes a hell of a lot more sense than Sky buying them. It’s possible MW got sky on the line just to drive up the price on any Stuff offer, but then they discovered sky was willing to pay silly money so then became the bag holder target.

[snigmac]

If we assume that it is very unlikely that Sky will proceed with the purchase of MW. If Sky doesn't get taken over and there aren't any other targets for acquisition, how does the board justify not providing a dividend or capital return? Maybe the board have something else up their sleeve?

[jimdog31]

If we assume that it is very unlikely that Sky will proceed with the purchase of MW. If Sky doesn't get taken over and there aren't any other targets for acquisition, how does the board justify not providing a dividend or capital return? Maybe the board have something else up their sleeve?

It only needs 51% to pass...

[snigmac]

With the wording of the annoucement it is possible that Sky was encouraged to looked at MW and complete due diligence. The annoucement states that there is a high degree of uncertainty. In my mind that would suggest that the deal is unlikely to go ahead until further information becomes available. Add the market reaction and analyst comments, I don't think Sky will proceed. If we assume Sky doesn't take over MW, is Sky now required to make another annoucement as soon as DD has been completed to propose a capital management plan?

[jimdog31]

With the wording of the annoucement it is possible that Sky was encouraged to looked at MW and complete due diligence. The annoucement states that there is a high degree of uncertainty. In my mind that would suggest that the deal is unlikely to go ahead until further information becomes available. Add the market reaction and analyst comments, I don't think Sky will proceed. If we assume Sky doesn't take over MW, is Sky now required to make another annoucement as soon as DD has been completed to propose a capital management plan?

Snigmac me ol mate. I'm praying you're right here. I don't think it changes when they discuss capital management as they've essentially put that off until august now anyway.... that was before the beans were spilled.

[Entrep]

With the wording of the annoucement it is possible that Sky was encouraged to looked at MW and complete due diligence. The annoucement states that there is a high degree of uncertainty. In my mind that would suggest that the deal is unlikely to go ahead until further information becomes available. Add the market reaction and analyst comments, I don't think Sky will proceed. If we assume Sky doesn't take over MW, is Sky now required to make another annoucement as soon as DD has been completed to propose a capital management plan?

This is very wishful thinking. The Sky board are the worst on the NZX.

[jimdog31]

MARKETS (http://email.mail.businessdesk.co.nz/c/eJxljc2KwyAURp8m2Qjh-lNNFy5m0_e46k2TJmpQM9B5-hE6u4EPPjiLc4LlQiu6j5sVIARomEFzrtQkHQ_LrKXW_SW4QUH E7ZjcVbdEtQaq--TzlH7G1WKAWXGNxvA7cDDmJgMI743jBF08HnZt7ayD_BrEo--_pcOIZadWx2K3tOQepO_s3_6g-hdq9pFTo1KQ1RULVfa64slw6exDmLveDv3OzpKfBWMkhinlK3k Kv6mCTO4)





Fonterra shares jump after share buyback programme announced




Oh look! an appropriate management response to an undervalued share price! imagine that?

Fonterra said it plans to spend up to $50 million on buying back its own shares from June 30.
The move is in reaction to the steep decline in the share price following Fonterra’s announcement on May 6 last year to restructure its capital base.
The shares, which can be owned only by farmers, closed Tuesday at $2.50, up from their record low at $2.22 late last month but down from $4.56 on May 5, 2021.
Chair Peter McBride said Fonterra has “looked at prevailing prices” alongside the co-operative’s strategy and overall business performance.

"Fonterra Co-operative Group's shares were also up 14% to $2.85."

So share price went from $2.22 to $2.85 in2 days .....

Meanwhile at sky.....

[Baa_Baa]

@Snowy, what's your thoughts on this, TIA.

[moimoi]

Hmm you're right. In that case, the approval by ordinary resolution is likely not something required by listing rules. Instead, it is in there to protect the board by having shareholders vote on the deal. It would also be a condition of any contract before going unconditional.

Essentially if we aren't getting paid for MW (i.e the deal isn't favourable) then we can vote no and the transaction won't proceed. Nothing to worry about, expect potential competence of management.

Except that in the general course of things...(which you may well know but maybe some others don't)

- Posters on Sharetrader highlighting that their going to vote no are unlikely to tip any company vote to no given share registries are dominated by institutional shareholders.

- Companies canvas the support of the same institutional shareholders BEFORE making any public comment or disclosure to public markets to inform the rats n mice retail holders.

- Name one company proposal voted down by retail holders on the NZX in the last say 20 years......?) ((Tip: There are none))

- While colourful...the last 10 days of posters probably hold less than 5% of the registry in aggregate. (could be wrong but doubt there is anyone in the top 20 posting on here..no offence)

Clearly very uncertain but the market appears to be surmising no capital return and no divi..

GLTA

[Rustycage]

Although I agree with most of what you’ve said there moimoi, unless there is no real skin in the game for the institutional holders (I.e. they are managing OPM only and don’t give a s*** what actually happens), surely they, like us, think that this deal sounds like an epic waste of $?

I haven’t seen a single person on here or hotcopper say “hey, this kinda sounds ok/good”

[mistaTea]

Although I agree with most of what you’ve said there moimoi, unless there is no real skin in the game for the institutional holders (I.e. they are managing OPM only and don’t give a s*** what actually happens), surely they, like us, think that this deal sounds like an epic waste of $?

I haven’t seen a single person on here or hotcopper say “hey, this kinda sounds ok/good”

Yes, 92% of shares controlled by those 9% of shareholders that have 100K+ shares - so obviously Sharetrader posters represent a relatively small percentage.

But as you say, the deal still has to stack up to get enough insto support. And I am sure they are scratching their heads as much as we are about this deal.

If SM announces a deal with MW - it is going to have to be very compelling to get the support.

And that will ultimately come down to price and how good a story she can spin about synergies and growth opportunities.

She would also need to make sure some sort of dividend is still paid I think (the bribe).

It’s a tall order I think.

[mistaTea]

They will hammer away at the “cross promotional” benefits/synergies no doubt.

Once we merge we will be the one-stop shop and preferred advertiser etc as we can offer attractive TV, radio and billboard packages to maximise your reach.

And, to be fair - that would be true.

However what is the upside to that realistically?

If combined advertising revenue is $280Mish…a solid 10% increase only pushes revenue up by $28M.

[winner69]

LOL.

I remember meeting Blair Woodbury in his office. I ended up drawing a diagram on his whiteboard to explain a concept around value creation/perception and why Sky finds itself in the situation it does today (a Kiwi brand disliked by many Kiwis).

He may have just wanted to get rid of me by that point and humoured me with the old “I’ve just learnt something new today” - but it did actually seem to grab his attention.

So if I get on the Board the first thing I am doing is drawing that stuffing diagram for them!!!

This Mediaworks thing is all mistertea’s doing ……Blair showed me that diagram and it definitely mentioned Mediaworks

From late 2020

[mistaTea]

This Mediaworks thing is all mistertea’s doing ……Blair showed me that diagram and it definitely mentioned Mediaworks

From late 2020

No my diagram said TELCO TELCO TELCO circled with a heart.

[bottomfeeder]

They will hammer away at the “cross promotional” benefits/synergies no doubt.

Once we merge we will be the one-stop shop and preferred advertiser etc as we can offer attractive TV, radio and billboard packages to maximise your reach.

And, to be fair - that would be true.

However what is the upside to that realistically?

If combined advertising revenue is $280Mish…a solid 10% increase only pushes revenue up by $28M.

But why should we pay to MW shareholders for the synergies we are able to achieve. Still think MW should only be worth bottom dollar.

[Joshuatree]

[QUOTE=Rustycage;961189

I haven’t seen a single person on here or hotcopper say “hey, this kinda sounds ok/good”[/QUOTE]


Need new glasses?
This looks like a TalkBack show with wannabe CEO's saying I could do that better..

[LoungeLizzard]

Need new glasses?
This looks like a TalkBack show with wannabe CEO's saying I could do that better..

Enlighten us with the names of gurus who think this a good idea?

[Rustycage]

Need new glasses?
This looks like a TalkBack show with wannabe CEO's saying I could do that better..

I legit think we could (lol). Here's a script I prepared earlier

---

RC meets with Oaktree
Oaktree: Hey RC, wanna buy MW?
RC: NicholasCagelaughing.gif no
Oaktree: But synergies/empire building etc
RC: GTFO here n00b, I've got a polo lesson/yacht party/gala dinner to get to

Later: RC meets with Board
RC: Hey board, now that we've crashed the share price, let's do a massive buyback/reinstate the dividend. This should facilitate an increase in our share price, create value for shareholders and start to save our reputations. At that point, our shares would be a far better currency to look at acquis/merger with a telco/NZME/strategic asset. If we work on saving our reputation now, even if this all goes to s*** and we get taken over by PE, when they figure out that we are fairly hopeless and we all get fired, our intact reps should allow us to get jobs on boards of the next NZ s***co
Board: Hooray for the SKT board! Bring out the Krug!

[jimdog31]

Enlighten us with the names of gurus who think this a good idea?

At the risk of appearing bi polar, i have been thinking more objectively this am about why Sophie would consider this to be a good idea.

We have to give her credit she has done a remarkable job in the core skt space this far after being handed a hospital pass.

Maybe her strategy is a little more future orientated than we think, especially around Renewal of the rugby in 2025.

Outdoor advertising is actually a growth sector in media, and was substantially increasing pre covid. This could be where some of the “40m” ebitda impact was felt.

over in Aus, i stumbled on a picture of who the bigger outdoor advertisers were, low and behold number 1 is Stan sport. This i believe has helped drive Stan sports growth. foxtel is also down the list at number 8 (jumping from 40) from the year before. So the outdoor space in aussie is a real big player for our “friends” at foxtel. This could be gold when rolling out STB boxes, and help with broadband.

What if the oms part of mediaworks has suffered from lack of invesment while PE has been trying to exit? could be some growth there.

https://www.oma.org.au/Industry-Performance

Now i come to Radio, the dog. This could actually be quite a lever to pull when it comes to securing sports rights, especially around event promotion, upcoming games, getting the stars on shows etc etc. Also radio could be gold when rolling out STB boxes, and help with broadband.

With outdoor and radio in the quiver, i think skt can pitch for sports rights (especially rugby) and it doesnt always have to be about the pure $$ they are paying. they have other angles they can sell why Sky should get the rights that frankly spark or others wont be able to provide (we can give you $XX m of advertising for free), they would have massive reach through kiwis eyes & ears.

Having said all the above, im not for the deal, im just trying to get inside Sophies headspace, as i do not believe she is silly.

[LoungeLizzard]

At the risk of appearing bi polar, i have been thinking more objectively this am about why Sophie would consider this to be a good idea.

We have to give her credit she has done a remarkable job in the core skt space this far after being handed a hospital pass.

Maybe her strategy is a little more future orientated than we think.

Outdoor advertising is actually a growth sector in media, and was substantially increasing pre covid. This could be where some of the “40m” ebitda impact was felt.

over in Aus, i stumbled on a picture of who the bigger outdoor advertisers were, low and behold number 1 is stan sport. This i believe has helped drive stan sports growth. foxtel is also down the list at nunber 8 (jumping from 40) from the year before. So the outdoor space in aussie is a real big player for our “friends” at foxtel. What if the oms part of mediaworks has suffered from lack of invesment while PE has been trying to exit? could be some growth there.

https://www.oma.org.au/Industry-Performance

Now i come to Radio, the dog. This could actually be quite a lever to pull when it comes to securing sports rights, especially around event promotion, upcoming games, getting the stars on shows etc etc.

With outdoor and radio in the quiver, i think skt can pitch for sports rights and it doesnt always have to be about the pure $$ they are paying. they have other angles they can sell why Sky should get the rights that frankly spark or others wont be able to provide.

Having said all the above, im not for the deal, im just trying to get inside Sophies headspace, as i do not believe she is silly.

I agree with you that Sophie has been admirably level headed and focussed on delivering on SKT strategy, which it makes it more "perplexing" (Forsyth Barr) that they would now go for a risky acquisition, before the strategy has even been fully executed.

As MistaTea has said, SKT would have to get MW for basically zero (acquiring $100m in debt) to even have a hope of this making sense financially. Even that is optimistic given the forecasts of a 30% decline in radio/billboard advertising in the next few years. And that this is an ailing, loss making company that PE are desperately trying to offload (padding the balance sheet with intangibles in the process).

Some commentators have estimated that SKY might be considering paying anything from $100-200m. That would put the SP into freefall and wipe out a third of SKT value. And the SKT Board's attention would be diverted from executing their successful strategy to trying to overhaul MW, in an effort to prove doubters wrong. And all that freecash would have gone and the company would be saddled with long term debt in a rising interest market.

I pray to any passing God that SKT are already rueing this move and will shortly announce that the due diligence is over and they won't be pursuing it any further.

[mistaTea]

I agree with you that Sophie has been admirably level headed and focussed on delivering on SKT strategy, which it makes it more "perplexing" (Forsyth Barr) that they would now go for a risky acquisition, before the strategy has even been fully executed.

As MistaTea has said, SKT would have to get MW for basically zero (acquiring $100m in debt) to even have a hope of this making sense financially. Even that is optimistic given the forecasts of a 30% decline in radio/billboard advertising in the next few years. And that this is an ailing, loss making company that PE are desperately trying to offload (padding the balance sheet with intangibles in the process).

Some commentators have estimated that SKY might be considering paying anything from $100-200m. That would put the SP into freefall and wipe out a third of SKT value. And the SKT Board's attention would be diverted from executing their successful strategy to trying to overhaul MW, in an effort to prove doubters wrong. And all that freecash would have gone and the company would be saddled with long term debt in a rising interest market.

I pray to any passing God that SKT are already rueing this move and will shortly announce that the due diligence is over and they won't be pursuing it any further.

What he said. Thumbs up.

[jimdog31]

What he said. Thumbs up.

im with both of you btw!!

Im just trying to make sense of what seems a nonsensical move.

Without some objective thinking, the proposal undermines Sophies credibility.

[mistaTea]

At the risk of appearing bi polar, i have been thinking more objectively this am about why Sophie would consider this to be a good idea.

We have to give her credit she has done a remarkable job in the core skt space this far after being handed a hospital pass.

Maybe her strategy is a little more future orientated than we think, especially around Renewal of the rugby in 2025.

Outdoor advertising is actually a growth sector in media, and was substantially increasing pre covid. This could be where some of the “40m” ebitda impact was felt.

over in Aus, i stumbled on a picture of who the bigger outdoor advertisers were, low and behold number 1 is Stan sport. This i believe has helped drive Stan sports growth. foxtel is also down the list at number 8 (jumping from 40) from the year before. So the outdoor space in aussie is a real big player for our “friends” at foxtel. This could be gold when rolling out STB boxes, and help with broadband.

What if the oms part of mediaworks has suffered from lack of invesment while PE has been trying to exit? could be some growth there.

https://www.oma.org.au/Industry-Performance

Now i come to Radio, the dog. This could actually be quite a lever to pull when it comes to securing sports rights, especially around event promotion, upcoming games, getting the stars on shows etc etc. Also radio could be gold when rolling out STB boxes, and help with broadband.

With outdoor and radio in the quiver, i think skt can pitch for sports rights (especially rugby) and it doesnt always have to be about the pure $$ they are paying. they have other angles they can sell why Sky should get the rights that frankly spark or others wont be able to provide (we can give you $XX m of advertising for free), they would have massive reach through kiwis eyes & ears.

Having said all the above, im not for the deal, im just trying to get inside Sophies headspace, as i do not believe she is silly.

I don't buy it being a great move strategically.

They overpaid for RP with a rationale that it would help keep the rugby rights. That turned out to be bollocks.

The idea that NZR/SL would turn down more cash from Spark Sport because we will give them some ads on The Rock is laughable to be brutally honest.

[mistaTea]

im with both of you btw!!

Im just trying to make sense of what seems a nonsensical move.

Without some objective thinking, the proposal undermines Sophies credibility.

Yeah I get that - and believe me...despite my negative posts I have tried to ponder the various angles to try to 'make it work' in my mind.

And no doubt SM must believe there are big benefits to justify going this far in negotiations. I am sure Cam Wallace and his bankers are also 'helping' SM a great deal with her thinking...

[Sideshow Bob]

Might have been on the WHS thread, but discussion about Joan Withers, who is a director of both WHS, but also SKT.

She was previously CEO of Fairfax but also The Radio Network, albeit a number of years ago. So presumably must be a large part of the decision making?? Doesn't seem like the rest of the board have much experience in radio but.....

[bottomfeeder]

What he said. Thumbs up.

Yep sounds like a plan. I hope someone in power is reading this.
I mean higher power.

[winner69]

Might have been on the WHS thread, but discussion about Joan Withers, who is a director of both WHS, but also SKT.

She was previously CEO of Fairfax but also The Radio Network, albeit a number of years ago. So presumably must be a large part of the decision making?? Doesn't seem like the rest of the board have much experience in radio but.....

I mentioned that yesterday .... responses were about her looks and whether she was committed with her $100k investment

Wonder if she a fan of Tova?

[Sideshow Bob]

I mentioned that yesterday .... responses were about her looks and whether she was committed with her $100k investment

Wonder if she a fan of Tova?

Sorry W69.....

Can't answer re Tova though.

[mistaTea]

Wonder if she a fan of Tova?


Ok mate, we get it - you don't like Tova.

[nztx]

Why is SKT not in a trading halt on NZX while this is going on ?

Obviously it may materially affect Share Price and value of the company

In other markets like OZ this sort of thing may well trigger a halt

[mistaTea]

The only rationale that holds any weight for Sky buying MW is that that the two companies can grow advertising revenue significantly together. Businesses will find Sky TV the 'no-brainer' to go to for their advertising because they can offer bundles across TV, radio and billboards - which would ensure maximum reach with one convenient bill.

That is great, but how much upside to revenue can we really expect from this?

Even if they boosted ad revenue by a whopping 20% (a Herculean task at the best of times, near impossible in this inflationary environment with possible recession looming) that would be maybe $50M more revenue. I mean, the upside just isn't enormous...yet the risk is very high (and certain if we overpay, which I am sure Sky will).

Any notion that owning a radio station and some billboards will make us a more attractive prospect to content partners (particularly sport) is just wishful thinking. No doubt this angle is being pushed by the 'helpers' on Page 12 of their glossy presso...

"Hey NZR! You really REALLY wanna go with us even if we won't offer to pay the most because now we can reach every single home AND car in NZ!!". I mean, come on.

[LoungeLizzard]

Why is SKT not in a trading halt on NZX while this is going on ?

Obviously it may materially affect Share Price and value of the company

In other markets like OZ this sort of thing may well trigger a halt

That's a good point. The NZX is much slacker than ASX when it comes to disclosure, so I suppose SKT are playing within the rules. Maybe they naively thought they could carry this out without anyone noticing and if the due diligence came to nothing, no-one would be the wiser. Not quite how how things worked out and again it throws the SKT Board's judgment in a bad light.

[nztx]

The only rationale that holds any weight for Sky buying MW is that that the two companies can grow advertising revenue significantly together. Businesses will find Sky TV the 'no-brainer' to go to for their advertising because they can offer bundles across TV, radio and billboards - which would ensure maximum reach with one convenient bill.

That is great, but how much upside to revenue can we really expect from this?

Even if they boosted ad revenue by a whopping 20% (a Herculean task at the best of times, near impossible in this inflationary environment with possible recession looming) that would be maybe $50M more revenue. I mean, the upside just isn't enormous...yet the risk is very high (and certain if we overpay, which I am sure Sky will).

Any notion that owning a radio station and some billboards will make us a more attractive prospect to content partners (particularly sport) is just wishful thinking. No doubt this angle is being pushed by the 'helpers' on Page 12 of their glossy presso...

"Hey NZR! You really REALLY wanna go with us even if we won't offer to pay the most because now we can reach every single home AND car in NZ!!". I mean, come on.


But with the way the economy is going & broken skeletons of businesses crawling out from under the Covid debri, would there be any net gain, or merely arrest the freefall a bit on potentially worse scenarios ?

I'm sure the PE holders of MW would have already tried to milk any possible gains & efficiencies out of the
can of worms long before now .. why did they not do a partnership joint bundling deal with SKT
long before now if the concept looked so good ?