Zero chance Sky is buying Mediaworks.
In fact, it's a joke to even suggested a New Zealand or Australian media company will end up acquiring Mediaworks. Nine Entertainment has $300m debt on the books already. Seven West even worst at nearly $600m of debt! Everyone is piss broke and the banks are leading zilch. It's a fight for survival for these companies as it is.
The global trend in media is for more vertical integration and direct to consumer business model. The only logical buyer is a large American media conglomerate. Not only are these companies colossal in size, but they can borrow at 30 year rates at less than 2% interest. Factor in the low NZD and it's a no brainer.
Mediaworks are likely holding out for a higher price. It will likely be a 3 horse race between Discovery, Universal (Comcast) and ViacomCBS.
Who ever the buyer ends up being, no doubt they are taking a good look at Sky at the moment. With a low market cap and a dominate position as the only pay TV operator in NZ, Sky will be a great addition to strengthen a media portfolio in NZ, if not, there's a chance a competitor could purchase them and take the upper hand.
It's an interesting time in the New Zealand media landscape. Big changes are happening. If an offer does come for Sky, we're talking a minimum of 30c a share starting point, with a likely bidding war pushing the price up even further. The recent equity raise does provide more leverage in a buy out, as it avoids the possibility of a firesale, AKA the dreaded Smith City scenario.
Mediaworks will likely be sold for at least $100m, or roughly 1X revenue. The price could be a lot higher with so much interests.
"Mr Market", is currently offering ~$275m NZ 'pesos' for Sky TV. I'm more than happy to take that offer today. At that price, it doesn't bother me weather a take over comes or not.