INL takeover offer for minority interests in Sky
INL will make takeover offer for minority interests in Sky
For release, 28 August 2003
Independent Newspapers Limited (“INL”) today announced that it will make a takeover offer for the shares in Sky Network Television Limited (“Sky”) that it does not already own. INL currently holds approximately 66% of Sky.
INL Chairman Ken Cowley said the INL board resolved today that INL will offer $3.35 in cash per Sky share plus 3 INL shares for every 10 Sky shares.
Telecom Corporation of New Zealand, which owns 12% of Sky, has agreed to accept the offer when it is made.
Mr Cowley said the board had considered all options for the future of INL and believed that the takeover offer as proposed was the best way forward for INL and all of its shareholders.
Based on INL’s closing share price yesterday of $4.27, the INL board considers that the offer is worth $4.63 per Sky share ($3.35 in cash plus $1.28 worth of INL shares for every Sky share).
Mr Cowley said that INL is obliged to disclose that the board has reached this decision today. However, formal notice of the offer will not be made until a prospectus on INL has been registered and is available to Sky shareholders. A draft prospectus has been lodged with the Companies Office.
The offer will be made under the Takeovers Code and the NZX has conditionally waived the requirement for any shareholder approval of the offer. Once the conditions to the NZX waivers are satisfied, the INL 2003 annual report is available and the prospectus has been finalised and approved, INL will be in a position to give formal notice of the takeover offer to Sky and the NZX.
Mr Cowley said that formal notice of the offer was expected to be made in mid-September. The offer is expected to be despatched to Sky shareholders in early October. Shareholders will then have 30 days to accept the offer.
Mr Cowley said the offer will be unconditional, although INL’s objective is to receive sufficient acceptances to lift its shareholding to 90%. As soon as INL reaches the 90% threshold, it intends to proceed to compulsory acquisition of the remaining Sky shares.
The INL board has decided that following the completion of the compulsory acquisition process, INL and Sky will be amalgamated into one company, which will retain the Sky name.
INL has also accepted an offer of $64 million from News Limited for the Geelong Advertiser. The Geelong Advertiser publishes three newspapers in Victoria, Australia and a number of local magazines.
All surplus capital in INL including the sale proceeds from the Geelong Advertiser, (expected to be approximately $375 million) will, subject to High Court and INL shareholder approval, then be returned tax-free to shareholders through a scheme of arrangement.
INL shares issued to Sky shareholders who accept the takeover offer will participate in the return of capital. Assuming the offer is successful, for each INL share the return of capital is expected to be approximately 80 cents, based on a capital return of $375 million. This would correspond to 24 cents per Sky share based on the terms of the offer. The return of capital will utilise almost all of INL’s available subscribed capital, which the Board understands will be in excess of $375 million following the compulsory acquisition process. INL currently expects that the return of capital will occur by the end of February 2004.
On completion of the proposed transactions, INL’s sole activity will be the Sky business.