Sky TV and Vodafone reach agreement to create NZ telco media powerhouse
- 09 June, 2016 06:43
John Fellet - CEO, Sky TV
Sky Network Television and Vodafone Group today announced that they have reached an agreement to create a leading integrated telecommunications and media group in New Zealand, via a combination of SKY and Vodafone New Zealand.
According to New Zealand Stock Exchange release this morning, Sky will acquire all of the shares in Vodafone NZ for a total purchase price of $3.4 billion, through the issue of new Sky shares giving Vodafone Europe B.V. a 51 percent interest in the combined group and cash consideration of NZ$1,250 million, to be funded through new debt.
Terms of the deal will see Vodafone NZ CEO Russell Stanners become CEO of the merged firm.
The new Sky shares will be issued at a price of NZ$5.40 per share, representing a 21 percent premium to SKY’s last close of $4.47 and 27 percent premium to SKY’s 1 month VWAP of $4.25 on 7 June 2016.
Vodafone is New Zealand’s leading mobile and number two broadband provider, with over 2.35 million mobile connections and over 500,000 fixed-line connections while Sky is New Zealand’s leading pay TV provider with over 830,000 subscribers, servicing New Zealand households with its portfolio of premium content.
"The merger with Vodafone is a transformational strategic step for our company," says Peter Macourt, Chairman, Sky.
"The transaction is also highly attractive to our shareholders. Our shares are being issued at a premium to market price and shareholders also participate in the substantial synergy benefits we expect from the transaction."
According to Sky CEO, John Fellet, the merger represents a "significant and positive step" in Sky’s evolution as a premium entertainment company.
"We already enjoy an excellent partnership with Vodafone, bringing together our two highly complementary businesses is in the best interests of shareholders and customers," he says.
"The Combined Group will offer exciting new packages with SKY’s premium entertainment content, Vodafone NZ’s communications and digital services of the future."
Echoing Fellet's sentiments, Stanners believes the merger brings together Sky’s "leading sports and entertainment content" with Vodafone's "extensive mobile and fixed networks".
"The combination with Sky will bring greater choice, enhanced viewing experiences and will better serve New Zealanders as demand for packaged television, internet and telecoms services increases," he adds.
According to both parties, the proposed transaction will build on the complementary capabilities of both companies to create a leading integrated telecommunications and media group in New Zealand.
Consequently, the combined group will have a “significantly enhanced ability” to innovate and create new and engaging products for a digital future, tailoring these products to both households and individuals in New Zealand, via its premium content and distribution assets.
The combined group will be one of the largest companies listed on the NZX Main Board.
More to follow…