Sky TV, INL merger in the wind

By GEOFF SENESCALL

Speculation about a merger of Sky TV and INL was rife in the market yesterday.

Broker sources say a merger proposal has been submitted to the Rupert Murdoch-controlled INL, which already owns 49 per cent of Sky.

But how receptive the board is to the offer is not known.

The newspaper group's managing director, Mike Robson, could not be reached for comment. Attempts to contact Craig Heatley, the founder of Sky and an INL board member, were also unsuccessful.

However, the INL board is understood to be scheduled to meet this week.

The market was mixed about the possibility of the two groups merging. On the one hand, joining the two would create a company of a size sufficient to interest overseas investors. That would probably see it trade at higher multiples.

The merger would also give the pay television company access to INL's cash flow, helping to finance Sky's digital TV roll-out.

On the other hand, the trend overseas is towards separating such assets rather than merging them.

INL closed down 15c at 400c; Sky TV closed up 1c at 381c.