I've been doing more extensive "Michael Burry" type research on the relationship between Sky TV and Infratil. I've compiled a narrative what I believe is an undeniable case for an imminent take over of Sky TV and a long term commercial plan that could potentially net Infratil a billion dollar profit or more within 5 years.
BE HOLD MY STRONGEST CASE YET FOR AN INFRATIL TAKE OVER OF SKY TV:
Firstly, a bit of background information. One of Infratil's best investments was in Royal Dutch Shell. For background information on this investment read NBR's article:
https://www.nbr.co.nz/article/infrat...ment-bd-143411
Basically, Infratil bought the assets off Royal Dutch Shell and re-branded the new company into Z Energy. Infratil then subsequently floated the company on the NZX a few years later for a significant profit. The question is, why would Infratil re-brand "Shell", a well known brand in New Zealand, and change it to something different?
The answer is two fold. Firstly, and most importantly was because of financial reasons. It cost Infratil over $10m per year in intellectual property rights. This was one of the main reasons why they re-branded. See this source:
http://www.stuff.co.nz/dominion-post...o-be-renamed-Z
Secondly, it hindered the company's growth ability as it was restrained from the parent company who controlled the "rights" and direction of the brand. The use of the brand came with terms and conditions and therefore if Infratil wanted to float Shell on the NZX it needed to re-brand the company.
This brings me to Infratil's investment in Vodafone, a company that Infratil bought last year for EUR $2 billion, in a joint venture with global investment company Brooksfield Asset Management. The deal was finance with significant debt on both Infratil's and Vodafone's balance sheet. Stock analysts suspect that Infratil will float Vodafone in the near future, in a similar arrangement as Z Energy.
HOWEVER, Vodafone will have to be re-branded for an IPO to happen. So, the question is why haven't they re-branded yet? The answer, is that there are certain benefits for maintaining the brand, including support and shared commercial arrangements from the parent company. This is especially important in the first few years after it is sold, but eventually a re-branding will have to happen.
So the next question is, when they do decide to re-brand, what do they call the new company?... Z Phone, Red Mobile Company, Not The Spark Company? Yes folks, you read it here first, SKY TV WILL TAKE OVER VODAFONE!!! As nutty as that sounds, that's what will happen. The Vodafone brand will be gone in New Zealand and be another past relic, just like Bell South!
I suspect the two newly formed companies will be refloated on the NZX, sometime in the year 2024-2026. With the combined revenue, it will have a market capitalization near that of Spark. The profits for Infratil will be gigantic. And the best part is that it's all funded with debt.
I suspect Infratil will retain a holding after the IPO, and they will fully exit a few years later, just like they did with Z Energy.
I put a value of Sky today of 75c a share based on the above scenario playing out. But retail investors won't see any part of that as the company will be flogged off for a poultry 30c a share.
Just lol.
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Originally Posted by Ogg
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