SKT Sky Network Television Limited.

[Getty]

It's easy to work this out.

The Infratil/Brooksfield takeover of Vodafone NZ was done at 7x EBITA.

Given that SKY has confirmed guidance for FY20 and also that analysts, such as the one from Forsyth Barr posted from the user above, suggest that Sky should benefit from Covid, then it's safe to assume that Sky's FY21 guidance is a reasonable figure to rely on.

Sky's FY21 midrange EBITA guidance is $115m (note that this number is 50% less than just 2 years ago). Factor in less CAPEX from the sale of OSB and it's very likely that this figure will be reached.

If we use a conservative 5x EBITA, then that puts the valuation of Sky at $575m or 32c per share. More than a 100% premium to today's closing price.

Will someone pay more than 13.7c? Dunno, you'd have to go down the line and ask the many different companies who might be interested in doing so, such as; Infratil, Brooksfield, Discovery, Comcast (UniverialNBC), AT&T (HBO), ViacomCBS, Telstra, Newscorp, Spark, Trilogy International Partners, Nine Entertainment plus potentially many others etc etc etc

"Harvey Weinstein, I want you to go down to Noo Zealand, and check out that little TV company,
See what they are doing different to us"
But Sir, do I have to?"
"Yes, now hurry up, I've heard there are others sniffing around!"...

Dr JPG.

Half price vasectomies if booked before CUT OFF time.

[Ogg]

When you're holding 1,337,751 @ .146 and the takeover comes.

[Getty]

looks like you're ready to get a shot away..

[tqtq]

This is where me and other members, such as Mista disagree.

Waiting for the rebound, and then selling is risky. The media industry is highly volatile. Just look at the history of Mediaworks! Changes are happening fast in the industry (as they always have been) and it's very uncertain even 12 months from now.

It will likely require more capital and investment to compete with other international companies going forward. For example, Discovery have made moves into NZ with their recent acquisitions. Disney has pulled content from Sky and going direct. Sporting rights are getting more expensive with competition from Spark. There are huge headwinds!

Neon, although growing nicely and benefiting from Covid, will continue to require investment and more content. The margin is small so it's a long term game. Does Sky have what it takes to continue this investment long term? It's likely going to be 10 years+ for decent returns, and even then, likely longer. This game is best played by the big boys, ie Netflix, Amazon etc.

With the selling of OSB it appears that management have finally ceded and now see the best option for investors is to divest and sell off assets. The satellite business and brand will be sold next, ie the entire company.

It's just a question of how much can you sell it for. Will it be $1, like with Stuff.co.nz and OSB. Or will it be like Sky UK and end in a bidding war at 15x EBITA. It think it will be somewhere in between.

Sky is an attractive takeover target today. But its not distressed like Stuff or MW so its unlikely to happen anytime soon in my opinion as it will be too expensive by comparison to other opportunities in today's market especially when companies are hoarding cash. (Note: I hope there is some kind of takeover offer soon as it will put sky in the news for the right reasons and highlight its value and push the sp up). Which leads me to believe that any takeover is more likely to happen once things return to normal. Therefore, I believe that a likely scenario is some kind of small rebound when things return to normal and the board (which have a responsibility to try and execute their future plans) will attempt to add some value by way of mobile / fibre reselling, or content creation, marketing to their database etc. But agree the media industry is being disrupted by the majors so anything could happen. Whatever the case, it makes for interesting watching.

[Ogg]

Sky is an attractive takeover target today. But its not distressed like Stuff or MW so its unlikely to happen anytime soon in my opinion as it will be too expensive by comparison to other opportunities in today's market especially when companies are hoarding cash. (Note: I hope there is some kind of takeover offer soon as it will put sky in the news for the right reasons and highlight its value and push the sp up). Which leads me to believe that any takeover is more likely to happen once things return to normal. Therefore, I believe that a likely scenario is some kind of small rebound when things return to normal and the board (which have a responsibility to try and execute their future plans) will attempt to add some value by way of mobile / fibre reselling, or content creation, marketing to their database etc. But agree the media industry is being disrupted by the majors so anything could happen. Whatever the case, it makes for interesting watching.

It's a bit like the game "Deal or no Deal". I'd rather just take the cash then open another suitcase.

You can always buy Infratil shares after the takeover. Like I've said before on the forum. It's likely Vodafone and Sky will be relisted on the NZX 5 years from now at a huge premium. This would likely push up Infratil's shareprice considerably, similar to their Z Energy investment. You'd make better gains by doubling up here quickly on SKT and then putting the profits into IFT.

[allfromacell]

It's a bit like the game "Deal or no Deal". I'd rather just take the cash then open another suitcase.

You can always buy Infratil shares after the takeover. Like I've said before on the forum. It's likely Vodafone and Sky will be relisted on the NZX 5 years from now at a huge premium. This would likely push up Infratil's shareprice considerably, similar to their Z Energy investment. You'd make better gains by doubling up here quickly on SKT and then putting the profits into IFT.

Do you have an exit strategy in mind for if a takeover doesn't eventuate?

[Ogg]

Do you have an exit strategy in mind for if a takeover doesn't eventuate?

Yes, we (as in me and the people I know) will replace the board.

[tqtq]

It's a bit like the game "Deal or no Deal". I'd rather just take the cash then open another suitcase.

You can always buy Infratil shares after the takeover. Like I've said before on the forum. It's likely Vodafone and Sky will be relisted on the NZX 5 years from now at a huge premium. This would likely push up Infratil's shareprice considerably, similar to their Z Energy investment. You'd make better gains by doubling up here quickly on SKT and then putting the profits into IFT.

I'd be happy taking the first deal too because it'd be a nice little earner given the current SP. I'm sitting on a very similar holding to your current holding. Would definitely buy more if I could.

[mistaTea]

For any of you who are buying and holding Sky shares with the primary reason being that you expect a takeover, you may want to look at this job ad posted today:

https://www.seek.co.nz/job/50416286?...7-72e1061e9e59

No way would they be hiring for this role if a merger with Vodafone was imminent.

Even if another player (like Discovery) was in negotiations with Sky, I doubt they would move along with hiring a senior position for the broadband strategy until the takeover was sorted.

To me it looks like pretty compelling evidence that takeover/merger discussions are not underway. Of course, I could be wrong - DYOR.

[Ogg]

For any of you who are buying and holding Sky shares with the primary reason being that you expect a takeover, you may want to look at this job ad posted today:

https://www.seek.co.nz/job/50416286?...7-72e1061e9e59

No way would they be hiring for this role if a merger with Vodafone was imminent.

Even if another player (like Discovery) was in negotiations with Sky, I doubt they would move along with hiring a senior position for the broadband strategy until the takeover was sorted.

To me it looks like pretty compelling evidence that takeover/merger discussions are not underway. Of course, I could be wrong - DYOR.

lol... I'd like to point out that I found the link first and PMed it to Mista.

It's a bluff people! Notice how they don't have "A full role profile can be provided upon request" at the bottom of the ad like all their other ads. It's cause they're an't one as it's a ghost listing. Besides, when Vodafone and Sky merge, they're keeping the Sky branding, so they're gonna need a head of broadband to convert their ~500k satellite subscribers.