Mystery bidder out to buy Sky TV
A mystery party wants to buy Sky TV in a “highly confidential” offer, the company announced yesterday.
“Sky has commenced engagement with the potential acquirer, although discussions are at a very early stage. As such, there can be no certainty that any transaction will eventuate,” the company told the NZX at 9am yesterday. It later added a price-sensitive tag.
The NZX placed a trading halt on Sky shares yesterday morning following the announcement, to allow it to “further engage” with Sky.
Sky — which has a market capitalisation of $355.3 million — won’t reveal the identity of the mystery bidder, but there is already speculation it could be a media giant such as News Ltd or Warner Bros. Discovery; a telco; or even a private equity firm such as Silver Lake, which has poured $200m into New Zealand Rugby for an almost 6 per cent stake in that business.
Sky had this year announced an on-market share buyback programme. The company paused purchases under that programme before the release of its full-year results last month.
“Prior to expiry of the blackout period during which the buyback programme was paused, Sky received a highly conditional, non-binding preliminary expression of interest from a third party to acquire all of the shares in Sky (NBIO).
“Given it is a highly preliminary, incomplete and confidential proposal, Sky is only disclosing receipt of the NBIO at this time in response to inquiries as to the current status of the buyback programme, and, subject to its continuous disclosure obligations, does not propose to make any further comment at this stage.
“In these circumstances, the board has continued the pause in Sky’s share buyback programme since release of the full-year results on
24 August 2023. Sky will confirm any recommencement of the buyback programme in due course.”
Like the rest of media, Sky is facing challenging economic headwinds. In August, it announced its full-year profit had fallen 18 per cent to $51m. Revenue rose 2 per cent to $754m.
Sky’s share price is barely shifting, generally bouncing anywhere between $2.30 and $2.60 this year.
Sky tried to buy MediaWorks in
2022. It didn’t go down well with investors.
“We got some really clear feedback from our shareholders,” said Sky TV chief executive Sophie Moloney.
“They understood strategically but it wasn’t the right time for investments. That’s your owners giving you really good feedback.
“It’s not to say if there’s an opportunity in the future to grow and make it more compelling from a margin perspective, of course, you’re open to it. But just in terms of right now, it’s not on the agenda.”
This year, Moloney issued an apology for a raft of technical difficulties that have afflicted the company’s much-heralded new Sky Box and Sky Pod technologies.
Thousands of Sky customers have been upgrading their old decoders to the new Sky Box, only to be left frustrated over a range of issues, especially recording bugs.
Moloney is confident those bugs are now being ironed out and says the company is also on track to roll out the Sky Pod streaming device to the entire market before Christmas.