Sky pair find INL bid unfair

Sky TV's independent directors said yesterday that Independent Newspapers' bid for the 34 per cent of Sky TV it did not already own was unfair.

Sky TV last week appointed independent directors John Hart, the former All Blacks coach, and Barrie Downey as a committee of two to consider INL's takeover offer.

INL has made a cash-scrip bid for Sky that values its shares at $4.63 each. It is offering $3.35 in cash for each Sky share, plus three INL shares for every 10 Sky shares.

On Tuesday, INL executive chairman Ken Cowley said the company would not increase its offer.

"There is no further premium to be had as INL already owns more than 66 per cent of Sky and with [12 per cent shareholder] Telecom's commitment to sell we will own around 78 per cent," he said.

"We expect Telecom to accept the offer for its 12 per cent stake as soon as the offer opens. Part of our agreement with Telecom is that we will not pay more for Sky shares for 12 months."

Downey said the independent committee disagreed with INL's view.

"We note that from the time that INL announced its intention to sell its NZ newspaper businesses to the date of INL's proposed takeover announcement, the S&P/ASX 300 media index had risen 23 per cent while the Sky price had risen a comparable 26.4 per cent.

"During this time, Sky has also made a number of announcements regarding operating performance, including its 2003 profit result, and these announcements have undoubtedly impacted on the current share price."

He said the independent directors believed Sky was one of New Zealand's leading companies.

"Based on preliminary advice and discussions with our financial advisers, UBS New Zealand, the committee is concerned with several aspects of the proposed offer and believes it may not be in the best interests of Sky shareholders."

It is understood that some Sky minority shareholders, including Tower Asset Management, are unhappy with the INL offer.

Tower's New Zealand equities manager, Wayne Stechman, said yesterday that his initial impression was that the bid was too low.

Retail investors make up 3 per cent or less of the register so a spread of institutions will determine whether INL reaches a 90 per cent shareholding.

Sky TV shares closed 5c higher at $4.85, and INL shares were 7c higher at $4.55 yesterday on an overall flat market.

- NZPA