Sky De & Sky Italia2 Jul 2014 14:36
I came across an article regarding the purchase and stajkes in both Sky Deutschland & Sky Italia that Murdoch is possibly considering. This article was in the FT paper.May 13, 2014. '...BSY { 39% ownerd by Century Fox) is in talks to buy Fox's stake inn Sky Deutschland ( 55% ) & Sky Italia ( 100% ).
This has the feel of a Murdoch master plan ( like what Vodafone are doing ). He may want to unify the € TV companies within BSY, then bid for the rest of BSY itself. He last tried this 3yrs ago.
BSY shareholders should weigh up the deal in more practical terms. They would get a German business with solid top line growth. Profits are modest, earningsbefore interest, tax, depreciation and amortisation were €85m in 2013. But pay-TV penetration in germany running at 19%and there is scope for more customers. They would also get a sluggish Italian business. Ebitda was €300m in 2013, against €500m in 2009.
Yes, there would be scope for synergies - Credit Suisse thinks £300m in 3yrs. BSY could give both businesses a shot in the arm...
Set against that is the huge difference the deal would make to BSY financial structure. Now, net debt is under 1 times ebitda. Assume the whole of SKY Deuctschlandis bought at current value €6.3bn & Sky Italia €3.7bn [ using BSY's own multiple ]. If both are cash deals, th combined company would have a net debt 4.6times, unless fresh equity is raised [ big possibility i say ]. This is a a radical and not neccessarily welcome change.