Lana Rhodes as COO of the new merged company.
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Shame that I didn't have the ball to go all in when it's trading in the $1.7x range. :D
So as it is turning out, it really did not matter whether you bought at $2.10, $1.85 or $1.68 - you just have to be there when the action starts.
SKY is the limit huh? :cool:
If Orcon, PE or anyone else wants to buy Sky...
The smart thing to do would be to buy Sky before Feb (when we expect Bowman will confirm a buyback of some sort).
As I mentioned in a previous post, Sky is on track to have $155M to $175M cash by June 30 2022 ($35M in the bank + $70M to $80M FCF + $50M to $60M campus sale).
That cash would be very useful to a player like Orcon/2D as they could use it to fast track their own 5G ambitions.
So long as they don't try to low ball Sky again, by trying to take advantage of a SP that is very low relative to earning power...a deal could yet be done.
I think they would need to be talking in the realm of a 50% premium to the current SP though to have a chance. Otherwise, shareholders are better off just waiting for the buyback/divvy which will push the SP beyond $3 anyway.
A 50% premium would be $612M ($3.50/share). That would need to be higher again if a multi-bid situation unfolds.
But a purchase price of $612M or so is still a great deal for a business like Orcon, given the $155M - $175M cash that comes with it (and no debt to pay off). In other words, at that price they would effectively be getting Sky for $437M - $457M.
That is not a bad price at all for a business with 1M customer relationships, earnings of ~$50M a year (with scope for further growth) and compliments their telco services. Over time Sky would be worth significantly more than ~$450M to a business like Orcon...when you think of the synergies, growth opportunities and how Sky would be a critical asset for an emerging telco to take on Spark and Vodafone...it can be shown that Sky TV is 'worth' well in excess of $1 Billion dollars to them.
So if interest in Sky has become even stronger as of late with the various possible suitors, the Board and Management are playing this well. Show the very real progress Sky has made, restore market confidence, get the SP up to a value that is more representitive of Sky's prospects and then have a much stronger hand to negotiate.