SKT Sky Network Television Limited.

[Dlownz]

I think the thing that surprised me was the lowball offer of 12 cents. Honesty would have though 20 cents would have been more suitable. Does anyone know how they would have come to this figure. Also after the share placement will they now have 1.5 billion shares or am I wrong. That's more than blt (bliss). Will this bring the share price down to 15 to 20 cents on opening?
I almost posted yesterday about sky must be about to announce something but didn't. This one while not surprising about the raising has surprised me with the price.
So what's the price of a company now heavily diluted and what could they get to in 2 years. 45 cents if we are lucky?
Mister tea I know you have a huge holding how are you going to approach this?

[mistaTea]

I think the thing that surprised me was the lowball offer of 12 cents. Honesty would have though 20 cents would have been more suitable. Does anyone know how they would have come to this figure. Also after the share placement will they now have 1.5 billion shares or am I wrong. That's more than blt (bliss). Will this bring the share price down to 15 to 20 cents on opening?
I almost posted yesterday about sky must be about to announce something but didn't. This one while not surprising about the raising has surprised me with the price.
So what's the price of a company now heavily diluted and what could they get to in 2 years. 45 cents if we are lucky?
Mister tea I know you have a huge holding how are you going to approach this?

Not sure how their advisors came up with the 1:2.83. However, as I mention in a previous post it is a clever way of making it look like a heavily discounted rights offer when in fact it is not. 1:2.83 @ 12 cents is exactly the same as if they did a 1:1 @ 34c (near enough to the last closing SP).

So it hopefully attracts a lot of interest given the 'huge discount' while in reality it allows them to raise as much capital as possible given the low SP.

Those who participate are going to do just fine - it is only those who don't or can't that will be diluted to oblivion. The ones that can't participate will create even more opportunity for those who can (given you can bid for 1: 2.83 + 20%)

If the rights offer is fully subscribed (and I expect it will be) then there will be more like 1.67B shares outstanding.

Who knows what the SP will do. In theory it would open at 17c I suppose (previous market cap + $157M cash injection). But if the analysts etc are broadly optimistic that Sky is much better placed now with lower debt and a clearer plan moving forward (i.e. the entry into broadband), then it is not crazy to think there will be more optimism which would lift the SP. By how much? Who knows. A new Sky that has multiple revenue streams (content aggregation, broadband and mobile) as well as an international rugby offering (once international rugby resumes) will clearly be worth a lot more over time than the current one-trick pony.

Remember that time Obama roasted Trump? And it ended up being the final catalyst for him to run for POTUS? I have wondered if Spark releasing Spark Sport, and then Moutter rubbing Sky's nose in it over the RWC would be an equivalent moment. Spark have not commented yet, but I imagine the notion of Sky fighting fire with fire, with already 1M customers to market to will make them squirm a bit now. The hunter becomes the hunted?

How will I approach it? I am going to try and get my hands on as many shares as I can purchase (my entire allotment + 20%). I do genuinely feel for those who can't participate - but the horse has bolted now. I will take my full entitlement plus some shares from those who can't participate.

At the end of the day, I am a capitalist.

[Baa_Baa]

Not sure how their advisors came up with the 1:2.83. However, as I mention in a previous post it is a clever way of making it look like a heavily discounted rights offer when in fact it is not. 1:2.83 @ 12 cents is exactly the same as if they did a 1:1 @ 34c (near enough to the last closing SP).

So it hopefully attracts a lot of interest given the 'huge discount' while in reality it allows them to raise as much capital as possible given the low SP.

Those who participate are going to do just fine - it is only those who don't or can't that will be diluted to oblivion. The ones that can't participate will create even more opportunity for those who can (given you can bid for 1: 2.83 + 20%)

If the rights offer is fully subscribed (and I expect it will be) then there will be more like 1.67B shares outstanding.

Who knows what the SP will do. In theory it would open at 17c I suppose (previous market cap + $157M cash injection). But if the analysts etc are broadly optimistic that Sky is much better placed now with lower debt and a clearer plan moving forward (i.e. the entry into broadband), then it is not crazy to think there will be more optimism which would lift the SP. By how much? Who knows. A new Sky that has multiple revenue streams (content aggregation, broadband and mobile) as well as an international rugby offering (once international rugby resumes) will clearly be worth a lot more over time than the current one-trick pony.

Remember that time Obama roasted Trump? And it ended up being the final catalyst for him to run for POTUS? I have wondered if Spark releasing Spark Sport, and then Moutter rubbing Sky's nose in it over the RWC would be an equivalent moment. Spark have not commented yet, but I imagine the notion of Sky fighting fire with fire, with already 1M customers to market to will make them squirm a bit now. The hunter becomes the hunted?

How will I approach it? I am going to try and get my hands on as many shares as I can purchase (my entire allotment + 20%). I do genuinely feel for those who can't participate - but the horse has bolted now. I will take my full entitlement plus some shares from those who can't participate.

At the end of the day, I am a capitalist.

I’d say you’re an optimist rather than a capitalist, this looks like the last roll of the dice for sky. Gltah you might need it

[macduffy]

The pricing of an issue is normally related to the price at which a company can attract underwriters.

[Dlownz]

Not sure how their advisors came up with the 1:2.83. However, as I mention in a previous post it is a clever way of making it look like a heavily discounted rights offer when in fact it is not. 1:2.83 @ 12 cents is exactly the same as if they did a 1:1 @ 34c (near enough to the last closing SP).

So it hopefully attracts a lot of interest given the 'huge discount' while in reality it allows them to raise as much capital as possible given the low SP.

Those who participate are going to do just fine - it is only those who don't or can't that will be diluted to oblivion. The ones that can't participate will create even more opportunity for those who can (given you can bid for 1: 2.83 + 20%)

If the rights offer is fully subscribed (and I expect it will be) then there will be more like 1.67B shares outstanding.

Who knows what the SP will do. In theory it would open at 17c I suppose (previous market cap + $157M cash injection). But if the analysts etc are broadly optimistic that Sky is much better placed now with lower debt and a clearer plan moving forward (i.e. the entry into broadband), then it is not crazy to think there will be more optimism which would lift the SP. By how much? Who knows. A new Sky that has multiple revenue streams (content aggregation, broadband and mobile) as well as an international rugby offering (once international rugby resumes) will clearly be worth a lot more over time than the current one-trick pony.

Remember that time Obama roasted Trump? And it ended up being the final catalyst for him to run for POTUS? I have wondered if Spark releasing Spark Sport, and then Moutter rubbing Sky's nose in it over the RWC would be an equivalent moment. Spark have not commented yet, but I imagine the notion of Sky fighting fire with fire, with already 1M customers to market to will make them squirm a bit now. The hunter becomes the hunted?

How will I approach it? I am going to try and get my hands on as many shares as I can purchase (my entire allotment + 20%). I do genuinely feel for those who can't participate - but the horse has bolted now. I will take my full entitlement plus some shares from those who can't participate.

At the end of the day, I am a capitalist.

How will rugby pass owners and nz rugby handle this. I don't imagine nz rugby have the money to put towards this at a time when they are squeezed as well as sky most likely holding back money from sports rights. 5 percent will turn into what?
From what I read of sky's announment it sounded like they were heading in a good direction. Although there forecast for the next year seemed too low if you ask me. Are they under promising or just being really cautious with the current climate. They increased subscribers all be it with streaming but a great rise. And only lost what I would think was a small amount of sattalite subscribers

[mistaTea]

How will rugby pass owners and nz rugby handle this. I don't imagine nz rugby have the money to put towards this at a time when they are squeezed as well as sky most likely holding back money from sports rights. 5 percent will turn into what?

Time will tell what they do. But as major shareholders I think Sky would have sounded them out.

if NZR don't participate then their current 5% will drop to 1.3%.

They need ~$7M to fully participate. Imo they would be crazy not to. Sky seem to be negotiating constructively with them on the payments issue (rather than coming down on them like a sledge hammer. Sky do actually want NZR to survive after all...).

The government is throwing a fair amount of cash at Sports bodies. NZR will clearly get a lot of the pot...If they do want to participate, I don't think coming up with the $7M will be an unsurpassable obstacle. Just an opinion, I stand to be corrected.

However from memory their 5% shares was based on $1.10/share. If they do not participate then 'new Sky' would need to build up to having a Market Cap of ~$1.83B for NZR to just break even. $1.83B is one hell of a long way from $300M (current market cap + $157M cash injection). So they really do need to participate I think.

Even worse for RugbyPass if they don't pony up the ~$8M. The shares they acquired were based on a SP of $1.24 I think. If they don't participate then Sky would need to hit a Market Cap of $2B before they broke even.

[Stranger_Danger]

Time will tell what they do. But as major shareholders I think Sky would have sounded them out.

if NZR don't participate then their current 5% will drop to 1.3%.

They need ~$7M to fully participate. Imo they would be crazy not to. Sky seem to be negotiating constructively with them on the payments issue (rather than coming down on them like a sledge hammer. Sky do actually want NZR to survive after all...).

The government is throwing a fair amount of cash at Sports bodies. NZR will clearly get a lot of the pot...If they do want to participate, I don't think coming up with the $7M will be an unsurpassable obstacle. Just an opinion, I stand to be corrected.

However from memory their 5% shares was based on $1.10/share. If they do not participate then 'new Sky' would need to build up to having a Market Cap of ~$1.83B for NZR to just break even. $1.83B is one hell of a long way from $300M (current market cap + $157M cash injection). So they really do need to participate I think.

Even worse for RugbyPass if they don't pony up the ~$8M. The shares they acquired were based on a SP of $1.24 I think. If they don't participate then Sky would need to hit a Market Cap of $2B before they broke even.

What they paid for their original shares is irrelevant. The only question is whether making a new investment at 12cps makes sense or not. If they were wrong at $1.10 and $1.24, who says they're not wrong at 12 cents?

Personally, I enjoy nothing more than recognising I was wrong about something, declining to put in more, and then getting the hell out of dodge. Sometimes the money you avoided losing is the best type of win there is.

From where I sit, there have been many large placements in Australasia in recent weeks, and I've struggled to get any of anything decent, but despite the small size, it sounded like I could possibly have gotten some of these. I don't see that as a compliment to either myself or Sky TV! Most of the placements have been snapped up, very often, they have been done deals before the plebs even hear about them.

Against the backdrop of this flood of capital looking for a home, just massive demand for anything decent, do you really think they would do this at 12 cents, with almost no institutional shares to be placed, if they felt they had better options?

This one smacks of desperation because it is desperate. It reminds me of the equally desperate Southern Cross Media raising - a business that is even more crappy - but it must be said the new SXL shares are trading roughly double the desperation price today. Hopefully for holders that can happen here.....but I'm still really, really struggling to see a longer term future for Sky TV, and without this raising, there wouldn't have been a short term future.

[mistaTea]

What they paid for their original shares is irrelevant. The only question is whether making a new investment at 12cps makes sense or not. If they were wrong at $1.10 and $1.24, who says they're not wrong at 12 cents?

I don't disagree there - see my previous post (https://www.sharetrader.co.nz/showth...l=1#post816786).

"That said, existing shareholders who still believe Sky have a profitable future would be crazy not to take the offer (if then can afford to). Their equity would be savagely reduced by non-participation to the point that they would probably never break even again.

For shareholders who have second thoughts about Sky's viability as a going concern (despite the injection of up to $157M cash) then throwing more good money after bad would be illogical."

Obviously if RP or NZR think that the story has changed, or they just made a mistake with the first placement...then purchasing more shares @12c per share just because 'it's cheaper' would be a bad idea. Neither can dump their existing shares for a couple of years of course, but regardless it would make no sense to throw more good money at a doomed business venture.

However, assuming they do still see a future for the business, and are of the view that they want to continue to be significant shareholders...and that the current offer is 'cheap'... then they will want to move Heaven and Earth to make sure that they get their full entitlement.

[Ogg]

I think the thing that surprised me was the lowball offer of 12 cents. Honesty would have though 20 cents would have been more suitable. Does anyone know how they would have come to this figure. Also after the share placement will they now have 1.5 billion shares or am I wrong. That's more than blt (bliss). Will this bring the share price down to 15 to 20 cents on opening?
I almost posted yesterday about sky must be about to announce something but didn't. This one while not surprising about the raising has surprised me with the price.
So what's the price of a company now heavily diluted and what could they get to in 2 years. 45 cents if we are lucky?
Mister tea I know you have a huge holding how are you going to approach this?

1,670,747,564 shares on issue post placement.

Equivalent to 17.4c (based on last trading price of 33c).

52 week low of 19c, equivalent to 13.8c post raise.

Recent high of 48c this month, equivalent to 21.3c post raise.

On 30th April net debt was $159m. Share price was 28c. Enterprise value approx $281m.

Placement at 12c gives enterprise value of $211m ($200m market cap plus $11m debt).

Difference of $70m or 24%, or 7c per share.

In other words, new capital is being injected at an equivalent price of 21c to the 30th April valuation.

If you bought shares below 21 you are not getting diluted. If you bought shares above 21 you are getting diluted - unless you participate in the entitlement.

I suspect it will resume trading at 21c.

[Entrep]

Sought after placements don't visit the placement price, desperate placements nearly always do, or they go under. I would put this one in the latter.