Sky takeover off the menu - bosses

By NZPA

Wednesday 30th October 2002

Talk of Independent Newspapers Ltd mounting a full takeover for its 66-percent owned subsidiary Sky TV still crops up at INL board meetings but new chief executive Peter Wylie today scotched any idea that it might happen.

Just how Sky fits into INL's plans came under fresh scrutiny at INL's annual meeting in Wellington, as the company underlined its desire to be a multi-media operation.

"New media has always been a threat to newspapers...the secret is, you must have a share of the entire communications action and you must dominate it," Mr Wylie told shareholders.

INL, under late former managing director Mike Robson, mulled merging with Sky two years ago.

But Mr Wylie ruled out the idea. "It has been discussed by the board and that's not on the agenda," he told journalists.

INL's decision to up its stake in Sky last year gave the publishing company access to the pay TV operator's tax losses, as it carries the technology cost of signing up new subscribers.

However, INL chairman Ken Cowley said Sky was expected to reduce its losses in 2003 and become profitable with positive cashflow in fiscal 2004.

He said INL's share price, which has dropped to $3.01 from $4.20 in March, was disappointing and did not reflect the value of the business, despite a restructuring of its core publishing unit.

Continued -- but denied -- rumours that Telecom was considering selling its stake of INL and Sky were unlikely to be the reason for the slide, he said. INL was caught up in the worldwide decline of media stocks and the difficult advertising market.

Meanwhile, INL -- which publishes about half the country's newspapers -- would continue to look for cost reductions and to use its journalistic and printing resources better.

In July, the company closed its Wellington-based Evening Post and merged it with the Dominion newspaper in a bid to cut costs and boost advertising rates.

After raising its consolidated 2002 net profit by nearly 45 percent to $37.8 million, the company had traded "satisfactorily" in the first quarter of this year, in line with company expectations.

Mr Cowley would not "speculate on speculation" that a forecast downturn in retail spending next year might affect advertising.

Business in New Zealand has not suffered the same level of downturn that US and British advertising had, but national advertising and classified business continued to be tough.

Mr Wylie, who arrived from Australia two weeks ago, rejected any suggestion his new position was a retirement job.

"I will never retire. I'm 60. I've had 40 years' experience in newspapers. I've got tremendous knowledge of all aspects of the industry. I know every function in publishing and the fire will never go out within me to work for a communications company."

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