Telco giant tipped as Sky raider

Brokers believe Telecom is the mystery buyer behind a failed Thursday-night raid for 10 per cent of Sky Television.

"Overnight, CS First Boston attempted unsuccessfully to buy 10 per cent of Sky TV," JP Morgan's head of institutional broking, John Rattray, said yesterday.

"We don't know who for, but it was obviously on an all-or-nothing basis and they weren't able to get them."

Broking firm JB Were and Son was also mentioned in connection with the deal, but spokesman John Cobb said he had heard nothing apart from the market talk.

A senior broker for CS First Boston denied that it made the attempt.

"Someone was looking around overnight to buy 10 per cent at $4, but there were no takers," said one broker.

" The suspicion is that it was Telecom rather than an institution, but quite why they would want to do that is a mystery."

ABN Amro broker Nigel Scott's theory was that the market believed it might have been Telecom trying to get some leverage on the 10 per cent holding it has in Independent Newspapers Ltd.

"But it's more speculation than anything at this stage."

Other brokers, who did not wish to be identified, said the rumour was that Telecom was the buyer in the all-or-nothing deal.

Shares in Sky TV, which on Thursday posted a $19.55 million loss, closed at $3.80 yesterday. Telecom shares ended the week at $5.13.

One source said the rumoured move was opportunistic.

He said the move intuitively made sense, with Telecom looking to bundle services with Sky.

On Thursday, Telecom and Sky announced a deal to offer marketing packages of phone, television and internet services.

Sky is tightly held. Independent Newspapers, controlled 49.3 per cent by Rupert Murdoch's News Ltd, owns about 47 per cent. Todd Corp owns 11 per cent and Tappenden Holdings, an investment firm controlled by two of New Zealand's richest men, Alan Gibbs and Trevor Farmer, has just over 10 per cent.

Last year, INL considered merging with Sky but the deal was put on the shelf.

Analysts believe that the surprise appointment this year of News Corp man Tom Mockridge as INL chief executive was to stitch up a merger with Sky as his recent experience with News Ltd has been in pay TV.

INL acting chief executive Rick Neville last night declined to discuss the possibility of Telecom's buying into Sky.

- STAFF REPORTER, NZPA