A voice of reason yay.
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Things not too bad ….Herald market update
Sky Network Television was down most of the day before rising 3.8 per cent to $2.84, picking up some ground it lost yesterday with its surprise announcement that the network wasn't looking to be acquired – but to be the acquirer.
No, it isn't a done deal but even if it doesn't go through, no matter how you look at it, SKT have inflicted unnecessary reputational and financial damage to their company. If they turn the deal down and announce some capital return to shareholders, they might recoup some of the losses, but they still wouldn't have covered themselves in glory.
And, heaven forbid, if the deal goes through - even at a rock bottom price - I remain firmly convinced that many people and institutions will exit their positions. I predict $2 per share if they proceed with the deal. We'll see how many holders remain chilled if that occurs.
Yeah that is very true.
If Sophie gets the deal for a ‘bargain’ at, say, $50M (plus inherit the debt) it would be interesting to know why it goes to a vote.
Ass covering by the board?
Doesn’t really instil confidence if the board sign off on a deal but then want to make sure there is no blow back on them if it turns to sh1t.
Well, good luck with that. History is littered with companies overreaching and their "good deal" turning very quickly into albatross's around their necks. I'm not saying that will happen, but SKT Board haven't yet done enough to earn confidence of shareholders in their decision making ability. Allowing their Chairman of the Board to not even live in the country is a case in point.
deletedelete
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And we're back.
Another day another 5c off the SP - all in a days work for our much valued Board.
I was remembering that the loss making) TV arm of MW was sold to Discovery for $20m and one can argue that that was the pick of the bunch, given that it included several entertainment channels, a streaming service and news/current affairs NewsHub. And from memory I don't think Discovery took on any debt with the deal - that was left for some other sucker to take on board. Enter Sky and talks of spending anything from $50-100m for for leftover radio and billboards. Plus $100m in debt.
I am increasingly of the opinion that if this is to go ahead it would have to come for virtually nothing upfront (ie 100m incl debt). Rather like the $1 paid to purchase STUFF News.
Yes even getting MW for ‘nothing’ and inherit the debt makes the mind boggle really.
Even paying $100M (the debt inherited) for an asset that doesn’t currently earn anything and has minor synergies at best…is a stretch to the imagination.
The only way I could swallow this would be if the Oaktree gave MW to us for free and went halves on the debt.
Even then, when I think about the opportunity cost of ruling out a NZME merger in the future…probably also ruling out being purchased by 2D… I would still think the deal is shortsighted.
I think the odds of shareholders voting for such a deal is very low, if not zero.
Really? Surely they canvas larger shareholders so as not to be embarrassed at the vote.
This board, and its absent chairman, are, without a doubt, the worst of any company I've ever held.
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They will have canvassed some opinion form big shareholders to test the temperature on a deal in principle.
I know of one large insto that has spoken to sky…but that insto does not have any info that we don’t have about MW (sky have to stay tight lipped with everyone).
This insto has said that they will keep an open mind, but that is as far as it goes. Obviously everyone needs to see the terms of the deal, and get a feel for MW’s latest earnings, as well as understand what kind of projections these guys have more for future earnings…
But this particular insto is more interested in getting sky to honour their divvy commitment and pay top end guidance.
Reading this story reminds me of that guy.....maybe 30 or 40 years ago who was so in love with Channel 3 when it was listed that he bought up 7 million shares just before it was de-listed from the NZX. He finished up with nothing of course. I try not to think about him before I go to sleep.:ohmy: