Sky TV gets an offer
Sky TV suspended stock buybacks as it received a non-binding offer. The stock is up +13% as of writing. AFR reports that the bidder is international and has engaged Rothschild and co. We wonder who would be the purchaser — we see limited value given cable is a “melting ice-cube”, though we like Sky’s sports offerings. If we let our mind wander, we wonder if WarnerBrothersDiscovery or Comcast are potential bidders. WBD already sells a lot of content to Sky’s Neon, and WBD is looking to gain a foothold with it’s HBO Max streaming service in foreign territories — purchasing Sky would give them both the lucrative sports service plus a built-in streaming audience. On the other hand, WBD is already cutting debt like no tomorrow (the AT&T demerger was expensive) — do they really want to buy a far-flung New Zealand TV provider? Comcast already owns a lot of cable and satellite assets, and its ownership of NBCUniversal and joint ownership of Hulu with Disney makes it a serious media player. On the other hand, PE has made bids for Sky in the past — could it be round two?
Sky TV gets an offer
Sky TV suspended stock buybacks as it received a non-binding offer. The stock is up +13% as of writing. AFR reports that the bidder is international and has engaged Rothschild and co. We wonder who would be the purchaser — we see limited value given cable is a “melting ice-cube”, though we like Sky’s sports offerings. If we let our mind wander, we wonder if WarnerBrothersDiscovery or Comcast are potential bidders. WBD already sells a lot of content to Sky’s Neon, and WBD is looking to gain a foothold with it’s HBO Max streaming service in foreign territories — purchasing Sky would give them both the lucrative sports service plus a built-in streaming audience. On the other hand, WBD is already cutting debt like no tomorrow (the AT&T demerger was expensive) — do they really want to buy a far-flung New Zealand TV provider? Comcast already owns a lot of cable and satellite assets, and its ownership of NBCUniversal and joint ownership of Hulu with Disney makes it a serious media player. On the other hand, PE has made bids for Sky in the past — could it be round two?
We reiterate that another hike by the end of the year is highly likely and we would not bet on any interest rate relief until the end of 2024.
Aus/NZ
The Australian market (ASX 200 Index) closed flat on Thursday ending a six-day rally as a sharp loss in healthcare stocks pared the index’s earlier gains. The New Zealand market edged -0.1% lower as Fletcher Building and the upcoming election kept investor on the fence with another quiet day of trade. Healthcare stocks were hard hit this week as markets view Ozempic and other like-treatments to taper of demand for medication and treatment related to weight gain. CSL taking the brunt down another -6% yesterday as investors digested the above as well as its AGM, where they noted margin headwinds for its CSL Behring business. On the bright side their 2024 guidance remained unchanged, net profit after tax is expected to be in the range of approximately US$2.9 billion to US$3 billion at constant currency, an increase of between 13 and 17%. The selloff has CSL trading at about 26x fwd earnings and an attractive buying opportunity for a core blue chip healthcare stock – now down at a 4-year low.