Sky Share Discussion Threads

[ball deap] 20/12/2016 17:25

I hope Murdock gets his baby back soon, SKY needs him. Skynews used to be credible now it's dog shot, it needs someone to put things right.

[betman] 20/12/2016 15:34

My understanding is that Fox currently own just under 40% of the Sky shares.

The Fox current proposal is they will not use these in the vote but need a minimum 75% approval from the remaining 60% of shares i.e. 45% of the total equity. Therefore if >25% vote against this then the bid is blocked.
However if this is the case then Fox can instead just go with a straight majority vote, where they would need about 10% more approvals to get to the 50%+ they need
Is this analysis correct ?
Can Fox just switch their takeover mechanism to suit them ?
It would seem the second option is easier for them to achieve ??

[anley] 18/12/2016 10:44

I do agree............

[boix] 17/12/2016 21:32

Wait until the 10 days (post bid) are up.
If no referral it should go through extremely quickly.
I am not expecting a referral.
But if it is held up beyond 2017, you will get £11.82/share.
This is now a 'low risk hold'

[tim 3] 16/12/2016 19:54

Will sell well before a year.Even though more would have been nice I am still happy as 2 weeks ago I was sitting on a big fat loss.Although it seems likely the deal will go through there is still plenty that could go wrong in 12 months.

[anley] 16/12/2016 13:43

You can always sell in the meantime for cash...............and in the meantime you can read what the big boys are doing - see above NEWS.

[buoycat] 16/12/2016 13:42

A year of limbo

[anley] 16/12/2016 12:08

You will as this is/maybe not the final outcome but your post is well constructed and I dare say what some big holders are telling Murdoch's advisers.............

We shall have to wait and see...................as the share price climbs to £10.....

[coleridge4] 16/12/2016 11:47

So, if I have understood the terms of the offer correctly small shareholders are unlikely to receive their £10.75 a share much before the end of 2017. In the meantime, the earnings of the company which have accrued since 1 July 2016 will be accumulated and not paid out to shareholders unless completion is delayed into 2018. In other words, it seems that if the deal completes in, say Dec 2017, 21st Century Fox will take the benefit of the last 18 months of earnings of Sky and the other shareholders will see those earnings taken from them.

If correct, these "lost" earnings need to be deducted from the purchase price offered to arrive at a "true" offer value. Further, shareholders will not receive their £10.75 for a good year, by the sounds of it, and might reasonably expect to make at least 4% elsewhere by investing in other ordinary shares carrying this level of risk in the meantime. I would therefore discount the price by 4% to reflect a cost of funds, for the delay proposed.

So, if discount the offer price by 4% the net present value of what is offered reduces to £10.34 (£10.75/1.04). Sky is forecast to make around 89 pence per share in that period (source FT Markets forecasts). These are the lost earnings I mention above. If we deduct that amount from the NPV of the offer price we end up with £9.45. This is what I see as the true value of the offer made by 21st CF and, amazingly, backed by the independent directors of Sky.

It is my understanding that the shares were trading at £9.21 as recently as 4 October 2016 which really puts the offer into perspective. In my view, this looks like an opportunistic corporate raid. I will keep the matter under review, and keep a close watch on the bidding war for UEFA Champions League rights, but confess that at the moment I have no appetite for voting in favour of this takeover given the very limited premium offered.

[buoycat] 16/12/2016 09:57

They are offering a special 10p div if doesn't go through by end of 2017

[spob] 16/12/2016 09:56

21st Century Fox makes £11.7bn formal bid for Sky




Takeover sets up showdown with smaller shareholders and UK and European regulators

FT

by: David Bond and Arash Massoudi in London and Matthew Garrahan in New York

15 Dec 2016


Rupert Murdoch’s 21st Century Fox has made a formal offer to take full control of Sky, setting up a showdown with smaller independent shareholders and a battle with UK and European regulators.

The £10.75 a share all-cash offer for the 61 per cent of Sky that the US media group does not already own values the UK-based group at £18.5bn, and will cost Fox £11.7bn. The offer comes almost a week after the European pay-TV broadcaster announced it had reached an agreement with Fox on a proposed deal.

James Murdoch, Sky’s chairman who is also chief executive of Fox, said he was confident the deal would pass “regulatory muster” and would be completed before the end of 2017.

“We will be engaging with the relevant agencies and authorities,” Mr Murdoch told an investor call, adding that he was sure “no meaningful concessions will need to be made”.

The UK government is unlikely to decide whether to refer the Fox takeover to Ofcom, the media regulator, before the new year. The deal is also expected to require clearance from the European Commission following Sky’s acquisition of Fox’s Italian and German TV businesses in 2014.

£11.7bn deal was settled over two weeks of talks after several years in the offing

Fox’s offer, which remains the same as the price agreed last week, values Sky at a 36 per cent premium to its closing share price on December 8, the day before news of the approach was announced. However, some smaller shareholders such as Standard Life, Jupiter Asset Management and Royal London have spoken out against the offer arguing that it undervalues Sky: its shares were trading at the offer price back in February.

To sweeten the deal, Sky said it would pay a special 10p dividend if the transaction was not completed by the end of 2017.

The Murdochs abandoned their last bid for Sky in 2011 amid the public outcry over the UK phone hacking scandal. Since then, their group has separated into two companies: Fox, which consists of a movie studio and television assets, and News Corp, which owns newspapers such as The Times and the Wall Street Journal.

Abandoning the bid in 2011 cost News Corp a break-up fee of £38.5m; this time Fox will pay Sky £200m if it walks away from the deal.

Fox said the combined company would help create a “consumer powerhouse reaching 100m households”.

“This deal will enable us to be a leader for the next wave of content consumption growth,” James Murdoch added.

21st Century Fox confident that bid will not be derailed this time

However, Sky faces challenges on a number of fronts, including sharp inflation in the cost of live sports rights and increased competition from BT and streaming services such as Netflix and Amazon.

John Nallen, Fox’s chief financial officer, told investors the US media group would pay for the transaction with cash and $10bn of new debt. There would be no new Fox shares issued to pay for the deal, he said.

A bridging loan would be used to finance the deal and replaced with longer-term financing once the takeover is completed.

To speed up the takeover process Fox and Sky will pursue a “scheme of arrangement” takeover structure, which requires the backing of only 75 per cent of a company’s independent shareholders.

[tim 3] 16/12/2016 09:53

Thanks poacher/spod.

[spob] 16/12/2016 09:38

added a summary and relevant links to the header


current price 986

offer 1075

current discount = 9% minus (0.5% stamp duty and dealing costs)

expected completion before end 2017 (no divs payable in 2017)


good luck folks

[poacher45] 16/12/2016 09:26

If a dividend is paid that will be deducted from the £10.75 as things stand at the moment.

[buoycat] 16/12/2016 09:11

Is the price not £10.75 less dividends? So if dividend is 15p that makes £10.60

[poacher45] 16/12/2016 09:02

If the bid goes through and is accepted then sky will pay you £10.75 with no selling expenses. In the mean time there is some doubt about the bid. It could end up higher or Teresa May might block it. Therefore at the moment you can only get about £9.80 plus selling costs. Your choice.

[tim 3] 15/12/2016 22:59

Going to sound really thick here but at what point do we get the chance to sell for £10.75.

[sportbilly1976] 15/12/2016 15:06

FYI - anyone on a s'bet here....

IG to raise margin from 5% to 20% at 4pm today on the back of the news & expected increased volatility.

I presume others bookies will follow

[anley] 15/12/2016 14:50

We small shareholders (that is with anything less than say 10,000 shares) will all cave in for £10.75 cash and 15p cash dividend.........as I and you all like the cash and we get out of a share that has not been performing and all square on our capital for many.

Forget VOD and others as they have no fire power nor will they want to mess with FOX etc as it all fits in well as one big happy family.......

I am an arbritage dealer and I can see who is dealing - GS and all of the advisers are MM and they will make a great deal of capital out of helping Mr Murdock and his family.

Here is another example on how UK plc is bringing in the bacon to help our poor balance sheet. I have lost count since ARM was the first to go for $24b.........just watch our foreigh reserves go up in 2017!! So why would the government stop them..........??

[argylerich] 15/12/2016 13:58

Lol maybe the shareholders should follow his high standards!

[nerdlinger] 15/12/2016 13:47

If Rupe was prepared to pay me 1800p I'd vote yes.

[argylerich] 15/12/2016 13:42

An excerpt from a Louis Capital research note courtesy of FT Alphaville (lots more on there:
"However, its believed SKY may well push
for an improvement once a formal offer is tabled. Sunday
Telegraph reported that Murdoch had already rejected
offers for their Sky stake . The report suggested these
bids came from Vivendi and VOD and that the Murdochs
had required 1800p per share to sell. Furthermore, SKY
traded as high as 1126p at this time last year. There also
remains a real possibility that activists may push for a
better offer"

So what are the chances of VOD or Vivendi, or anyone else, coming back to the party to take the non-Murdoch shares?

[ajmace] 15/12/2016 13:21

Surprising that this has not gone up on the news.Obviously the market thinks the deal may not go through even at the agreed low price of £10.75

[nerdlinger] 15/12/2016 13:17

I only hold 1,477 of these but I've just changed the preferences on my ISA so I can vote against the takeover, for what it's worth.

[anley] 15/12/2016 13:16

Goldman S using CFD (500,000 @987p to go short)..............its all starting.....