SKT Sky Network Television Limited.

[The diver]

I sure hope not.... I find every important announcement from sky has me waiting for the next announcement for any certainty about their decisions. How long could they string us shareholders along?

Yes they have stated June and they will not move from this date (my post was meant to be tongue in cheek).

I find myself in a forever cycle of deja vu with Sky saying they will announce their plan this date and then delaying announcing anything so this certainly does not surprise me

[mistaTea]

I find myself in a forever cycle of deja vu with Sky saying they will announce their plan this date and then delaying announcing anything so this certainly does not surprise me

I think this is good news.

Sky must still be on track to meet earnings guidance or else they would announce to the market it's all gone to sh1t (and we could infer that they are hoarding cash because we are back on Struggle Street).

But that is not what the announcement says. It says:

"In the context of the previously referenced review of investment opportunities, Sky NetworkTelevision Limited advises it is deferring any further update on strategy and capital allocation..."

In my earlier posts I went to great pains to point out that we don't (or shouldn't) want Sky to return cash to us if the cash can better be used to grow the business.

Only if there are no other great investment opportunities should we then seek buybacks and dividends (in that order).

So, either Sky is looking to make a material investment (buy something?) and we just hope it isn't another dog like Rugby Pass...

OR...and infinitely more likely...they are going to sell the business.

[jimdog31]

I think this is good news.

Sky must still be on track to meet earnings guidance or else they would announce to the market it's all gone to sh1t (and we could infer that they are hoarding cash because we are back on Struggle Street).

But that is not what the announcement says. It says:

"In the context of the previously referenced review of investment opportunities, Sky NetworkTelevision Limited advises it is deferring any further update on strategy and capital allocation..."

In my earlier posts I went to great pains to point out that we don't (or shouldn't) want Sky to return cash to us if the cash can better be used to grow the business.

Only if there are no other great investment opportunities should we then seek buybacks and dividends (in that order).

So, either Sky is looking to make a material investment (buy something?) and we just hope it isn't another dog like Rugby Pass...

OR...and infinitely more likely...they are going to sell the business.

Wouldn't that be marked Price sensitive??

[LaserEyeKiwi]

One wonders if Sky is a little worried about the giant amount of funding TVNZ/RNZ received in yesterdays budget ($350 million+)

[mistaTea]

Looking back into 'ancient history' I note that in 2016 Sky released a price sensitive announcement to advise that there had been a material drop in Pay TV subs (45K).

So if subs/earnings had deteriorated in a material way from consumers cutting back spending I would have expected that information to be part of the announcement today. But it wasn't and so I think the reason for holding on to the cash is unlikely due to that.

LEK mentions the TVNZ/RNZ merger...no doubt Sky, NZME and Discovery NZ are watching this closely...but I doubt this has anything to do with the announcement today either. The merger is old news, and we have known that the new entity will be 100% backed by taxpayer dollars...the $350M (which will be spent largely on merging operations and building out new platforms across TV and radio) is not enough of an 'event' to cause Bowman to not distribute ANY of the cash. If this was the reason for additional caution, I would think that Sky would still return some of the $150M (even if they decided to hang on to the vast majority of it).

So although it is speculative, I do believe that 'something' (M&A) is more likely in the works. What that is (if anything) we will have to wait and see.

My personal view is that someone is more likely to make a cash offer to buy Sky (as opposed to Sky doing some kind of acquisition). Plenty of overseas cash still looking to invest: https://www.nzherald.co.nz/business/...RP5QFOS57LMNU/

[jimdog31]

Looking back into 'ancient history' I note that in 2016 Sky released a price sensitive announcement to advise that there had been a material drop in Pay TV subs (45K).

So if subs/earnings had deteriorated in a material way from consumers cutting back spending I would have expected that information to be part of the announcement today. But it wasn't and so I think the reason for holding on to the cash is unlikely due to that.

LEK mentions the TVNZ/RNZ merger...no doubt Sky, NZME and Discovery NZ are watching this closely...but I doubt this has anything to do with the announcement today either. The merger is old news, and we have known that the new entity will be 100% backed by taxpayer dollars...the $350M (which will be spent largely on merging operations and building out new platforms across TV and radio) is not enough of an 'event' to cause Bowman to not distribute ANY of the cash. If this was the reason for additional caution, I would think that Sky would still return some of the $150M (even if they decided to hang on to the vast majority of it).

So although it is speculative, I do believe that 'something' (M&A) is more likely in the works. What that is (if anything) we will have to wait and see.

My personal view is that someone is more likely to make a cash offer to buy Sky (as opposed to Sky doing some kind of acquisition). Plenty of overseas cash still looking to invest: https://www.nzherald.co.nz/business/...RP5QFOS57LMNU/

If PE had a nibble at $2.30 back in the day, what is it now worth to that same crowd (if they were still interested) with the $150m?

[mistaTea]

If PE had a nibble at $2.30 back in the day, what is it now worth to that same crowd (if they were still interested) with the $150m?

With the strong Balance Sheet, STB base stabilisation, streaming growth and FCF I would suggest 50% more.

That would be about a 43% premium to the current SP (within the typical 30 - 50% range, but at the higher end).

Some of us believe Sky is worth more than $600M, but the reality is the public markets are never going to value Sky for what she should theoretically be worth in her current state (solely a content aggregator).

I think a $600M price is also favourable to the buyer as they are effectively purchasing Sky's operations for only $450M. There has to be a decent upside for them to want to buy.

So they get the business for a very good price, and shareholders get certainty (~$3.40 per share) after what has been a very turbulent past few years.

It would be nice if The Board (and Jarden) could get multiple parties interested to negotiate a higher price of course. But I wouldn't hold my breath!

[xafalcon]

One wonders if Sky is a little worried about the giant amount of funding TVNZ/RNZ received in yesterdays budget ($350 million+)

I think they would be equally worried about their Discovery content, now that they are competitors. Rush TV has a lot of Discovery content, and the Aussie version, also called Rush on the Ch9 network, has even more. As exclusive committments with Sky TV expire, they may not be rolled over

[Moneyman]

Anyone think the delay in the deal between NZR and Silver Lake are related to these delays? Seems like too much of a coincidence….

[bottomfeeder]

Anyone think the delay in the deal between NZR and Silver Lake are related to these delays? Seems like too much of a coincidence….

No doubt something going on involves SKY.