SKT Sky Network Television Limited.

[Ogg]

[mistaTea]

I think I did sight the listing earlier...in Never Never Land!

[mistaTea]

https://www.colliers.co.nz/en-nz/new...-13-april-2021

This is the only mention I can find of the Sky TV land sale on Colliers. Dated 13 April.

Poor b@stards got half way through the month and still thought the sale was happening! That they would get a tasty commission!

[Habits]

https://www.colliers.co.nz/en-nz/pro...nd/nzl67014021

If this piece of sh1t is worth $8M+GST...imagine what Sky would get for their 26,500sqm property (net lettable area 9,300sqm)!

Of course, no listing yet and no doubt the property sale will have been kyboshed because Vocus will need the space to combine HO and also add in a Data Centre etc...

7.95m/3222sqm x 26500sqm comes to 65.3m .... shhhh don't tell Ogg, he will have heart failure

[mistaTea]

7.95m/3222sqm x 26500sqm comes to 65.3m .... shhhh don't tell Ogg, he will have heart failure

Let's just say that, for the sake of argument, the equation is that simple and Sky could get that amount for the property.

It just makes even more of a mockery of the low quoted value of the business.

If you could get all of the shares at the closing SP today you could buy Sky for ~$307M. You could immediately sell off a chunk of property as announced to the market and realise ~$65M.

That means that you are effectively buying the Sky TV operations and remaining tangible assets for ~$240M.

Zero debt too.

That works out to be about 1.6 times projected EBITDA. Even if you adjust EBITDA down to allow for the lease costs captured under IFRS-16, you still have an 'adjusted EBITDA' multiple of 2.

I appreciate that things are different for Sky now as they face serious competition, and the business needs to continue to adjust and adapt to the new landscape...

But EBITDA multiples in the range of 1.6 - 2 is just plain ridiculous.

Of course this is all a moot point as we suspect the land sale is no longer going ahead. After all, in the long term that 26,500 sqm of goodness will be worth significantly more than $65M to Vocus, given what they could do with it...

[mistaTea]

As recently as April 28 Colliers were still banging on about the Skt TV property sale: https://www.colliers.co.nz/en-nz/new...-28-april-2021

References out to a Vlog:

https://www.youtube.com/watch?v=xVjWm4bvZSo

At 3:03 he mentions Sky.

[mistaTea]

https://www.nzherald.co.nz/sport/cri...SWPWX5SV3L2DY/

More savings for Sky...

https://media.tenor.com/images/a1ace...f3f2/tenor.gif

[Ogg]

“All things are ready, if our mind be so.”

[mistaTea]

Healthy trading volumes today on the NZX.

Was reading over the previous merger presentation. Just do a find and replace 'dafone' for 'cus', update the earnings figures for both companies and we have a deal. The arguments are just as strong today for a merger with a telco.

Even more strong today than it was in 2016.

I have been convinced since the announcement that Vocus will be Sky's broadband provider that the two companies are a match made in Heaven. There is no doubt in my mind about that.

The only thing I have been less clear in my mind about is 'how' such a deal could be constructed. Especially with Sky's market value that is completely divorced from Earning Power.

And isn't it obvious? The same type of approach that they took in 2016!

Part cash payment, part equity.

Cash: the new 'Sky 2.0' take on some debt to make the payment to Vocus AU.
Equity: the balance of the payment is made by issuing new shares in Sky to Vocus AU. This allows Vocus AU to keep a hand in with a significant stake in Sky, realising large upside which will come over time.

It also completely eliminates the problem around Sky's unreasonably low quoted value. Valuations based on sensible EBITDA multiples are required for each business to get the deal done.

Sky is the bigger business by far in terms of Earning Power, so you can't do a deal with Vocus getting a stratospheric multiple of 9, while Sky only gets 3 or 4. No way could the Sky Board support that, or get shareholder support. No decent investment banker could recommend that in an independent report.

The new business would be valued north of $1B and would hit the ground running with ~1M Sky customers as well as ~250K Vocus broadband customers. Only ~40K mobile customers, so huge growth potential here with the right bundles.

And the most awesome part of a deal constructed in this way...I get to keep my shares! What is best for Sky and Vocus in the long term ends up being best for me too.

Of all the crazy takeover 'theories' about Infratil, and NBCUniversal...and more recently Discovery...all just wishful thinking...

...a move to merge by Sky and Vocus is actually a business deal that has strong merit and makes sense (if I do say so myself).

[Ogg]