Sky Network Television Ltd
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SKT Details
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Merger with Vodafone NZ: Sky Network Television Ltd (ASX: SKT) reported that they are merging with Vodafone NZ to build a more integrated telecommunications and media group in New Zealand. As a result, the group’s stock surged over 20.48% on June 09, 2016. Vodafone would hold a 51% stake in the combined group by issuing new SKY shares and NZ$1250 million in cash, which is comparable to an Enterprise Value (“EV”) of $3,437 million. Combined entity would generate cost, capital expenditure and revenue synergies having a net present value of over NZ$850 million, or NZ$1.07 per share. Meanwhile, the new shares of SKT would be issued at $5.40 per share, which is 21% premium to SKY’s share price of $4.47 and 27% premium to the stock’s one month VWAP of $4.25. But SKT stock has already crossed these levels and now trading at $5 (as of June 09, 2016).
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Recommendation: We give an “Expensive” recommendation on the stock at the current price of $5.00
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Building a leading integrated player (Source: Company Reports)
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