TVNZ gets increased offer for Sky stake

By Geoff Senescall

A consortium of six institutions last night turned up the heat on Television New Zealand with a sweetened $133 million (290c a share) bid for its 12.6 per cent Sky TV stake.

This is $6.9 million more than the 275c a share offer from three existing Sky shareholders - publisher INL, businessman Craig Heatley and Todd Corporation - which for some reason the state-owned broadcaster seems set on accepting.

Last week TVNZ thumbed its nose at two offers for the Sky shares. On Thursday the consortium, represented by an Auckland-based broker, offered 285c a share, followed by 286.5c the next day.

Both offers were unconditional.

The lower offer by the three Sky shareholders only went unconditional at 5pm yesterday. This was because they were deemed as insiders and had to give 15 days' notice under the stock exchange's notice and pause regulations adopted by Sky.

As yet, no transfer has taken place. If the three shareholders want to increase their offer, they must give a further two days' notice.

One of the institutions in the consortium, which declined to be named, said that TVNZ was duty bound to accept the highest offer and thereby maximise the return to taxpayers.

"I find its intransigence very difficult to understand," the institution's spokesman said.

Furthermore, reading through the filings made under notice and pause, there was no mention of any material contracts, such as programming rights, which would bind TVNZ to sell its stake to the three existing shareholders.

Sky had also not mentioned that there were any material contracts between them, he said.

If TVNZ had entered into any onerous break-fees if it did not proceed with the sale to existing shareholders, it had not given any indication of at which point a new bid would be acceptable.

The chief executive of TVNZ, Rick Ellis, did not return a call yesterday. Chairwoman Rosanne Meo is overseas.

The broadcaster put its 46 million shares on the block last month. Its advisers apparently suggested that TVNZ should make an institutional placement through a competitive book build process.

But TVNZ apparently insisted on a sale to the existing shareholders. Sky's shares closed unchanged at 319c a share.