Pair named to check fairness of INL offer

Sky Network TV has appointed a committee of two independent directors to consider Independent Newspapers' takeover offer.

The committee comprises former All Blacks coach John Hart and Barrie Downey.

It will commission independent advice on the cash and scrip bid that values Sky shares at $4.63 each. Sky shares closed at $4.72 yesterday.

INL is offering $3.35 in cash for each Sky share, plus three INL shares for every 10 Sky shares.

Downey said the formal offer was not likely to be made before next month, so there was time to properly evaluate the proposal and communicate the outcome to shareholders.

"While Sky's second largest shareholder, Telecom, has announced it considers the offer fair and that it will accept the offer, shareholders should note that Telecom is also a significant shareholder in INL ...

"[It] may well have a different view of the merits of the proposed takeover compared to a minority Sky shareholder who does not have an equivalent INL shareholding."

Telecom owns 12 per cent of Sky and 10 per cent of INL.

INL, 45 per cent controlled by Rupert Murdoch's News, already owns 66 per cent of Sky.

In November 2001, Downey and Hart were issued with 25,000 two-year share options each to "align their interests with those of small shareholders".

At the time, then Sky chairman Tom Mockridge said the board saw the options as a performance incentive. Downey and Hart are each paid $32,000 a year in directors' fees.

Apart from Hart, Downey and chief executive John Fellet, all the company's eight-member board are directors of either Telecom, INL or broadcaster Foxtel, which is part-owned by News Ltd.

- NZPA