INL wants two-thirds of Sky

By Phil Boeyen, ShareChat Business News Editor

Monday 7th May 2001

Independent Newspapers (NZSE: INL) is keen to take its stake in pay-TV operator Sky (NZSE: SKY) to 66%.

The publishing company, which currently holds just under 50% of Sky, has announced two restricted transfer notices for an extra 65 million shares.

INL wants to buy Todd Capital's entire 11% shareholding in Sky, issuing shares as a consideration on a one for one basis.

It has also issued a second RTN to buy between 5% and 6% more shares in the price range between $3.30 and $3.60 per share.

Under the issued notices INL can begin acquiring the shares from May 28 and the company says it intends to draw down debt to fund the on-market acquisitions.

If the transactions are completed INL's shareholding in Sky will rise 49.96% to around 66.25%.

Major shareholdings in INL after the transaction will be News Limited at 44.4, down from 49.3%, and Todd Capital at 14.5%, up from 5%.

Independent Newspapers CEO, Tom Mockridge, says the transaction is consistent with his company's understanding that Todd Capital would like to align its New Zealand media interests with News in INL, and is consistent with INL's desire to lift its exposure to Sky TV.

"Todd Capital has a long history of making strategic investments in this sector, and the common shareholding in INL would allow a joint focus on building a major integrated New Zealand media business.

"We are confident that under the excellent leadership of Sky CEO, John Fellet, Sky can continue to grow strongly."

Mr Mockridge says the increased debt required to fund the on-market share acquisition can be comfortably accommodated within his company's existing debt covenant ratios.

He also says the company would "expect to retain the capacity to pay dividends at a level consistent with previous years."

"It is the company's current intention to continue paying fully-imputed dividends at that level on the expanded capital base if the proposed transactions are completed.

"The change in shareholding levels of each company is not expected to impact on INL's ability to carry forward its imputation credits nor Sky's ability to carry forward its tax losses."

Mr Mockridge said INL had no plans to buy Sky shares beyond its targeted 66.25%.

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