BSKYB Shares - Worth a punt?
Discussion
ringram said:
Criminal investigation would hurt a lot.
Best to hope that there is nothing to hide in the US else there will be blood.
I think you are talking about News Corp. Not Sky. Sky doesn't have any business in the US.Best to hope that there is nothing to hide in the US else there will be blood.
BSY LN
NWSA US
Just FYI News Corp have now pulled their bid for Sky.
So right now, Sky should be valued on its FUNDAMENTAL value rather than including some bid speculation in the price.
I'm actually thinking about buying some....it's a very good business and the barriers to entry are huge. The thing to remember with Sky is that it is a media content company and not a Satellite TV company....because of it's dominant position it's very hard to compete with them. Basically someone has to outbid them for sports rights which no one else can really justify and a new entrant would burn millions of pounds for the first few years. Virgin tried taking them on at the media game and gave up they have now decided to concentrate )quite rightly) on their competitive advantage...their network.
Cheese Mechanic said:
If Roop gets lawsuits in the US , it could cost him a fortune, which means a brave buyer could get shares really cheaply. Bit of a gamble, but perhaps a good return in time...with luck. 
And how exactly would US lawsuits affect BSkyB?You do know what the first B stands for right?
walm said:
ringram said:
Criminal investigation would hurt a lot.
Best to hope that there is nothing to hide in the US else there will be blood.
I think you are talking about News Corp. Not Sky. Sky doesn't have any business in the US.Best to hope that there is nothing to hide in the US else there will be blood.
BSY LN
NWSA US
Just FYI News Corp have now pulled their bid for Sky.
So right now, Sky should be valued on its FUNDAMENTAL value rather than including some bid speculation in the price.
I see a lot of speculative arbitrage noted by ZH on BSY. LLOY holds $190M worth for example..
ringram said:
I see a lot of speculative arbitrage noted by ZH on BSY. LLOY holds $190M worth for example..
In any M&A deal a huge number of the shares will end up in the hands of the merger arbitrage hedge funds.That is what they do.
In this case, since July 4th any arb fund worth its fee would have been getting the hell out of dodge with regard to BSY.
I call these guys "forced sellers".
It often leads to an artificially depressed price which is why BSY might be interesting.
However, the question is what BSY is worth standalone - no bid.
On very rough numbers 8x EBITDA seems reasonable perhaps which on CY13 consensus implies about 800p.
Remember the board a while back said the bid would have to be at least 800p for them to put it to shareholders.
However, even when the bid was in play a 10x EBITDA multiple would be punchy: and that is what you need to believe 1,000p.
10x MIGHT be possible for NewsCorp to have paid but only because there were a boat-load of synergies, taking the implied REAL multiple lower.
That said, Sky has always traded very expensively historically. At a premium to peers and the market generally so even with peers on say 8x perhaps somewhere between 8-10x is reasonable.
So anywhere between £8-10, seems about right.
Historically they have traded on 10x in the past (pre-crisis).
walm said:
In any M&A deal a huge number of the shares will end up in the hands of the merger arbitrage hedge funds.
That is what they do.
In this case, since July 4th any arb fund worth its fee would have been getting the hell out of dodge with regard to BSY.
I call these guys "forced sellers".
It often leads to an artificially depressed price which is why BSY might be interesting.
However, the question is what BSY is worth standalone - no bid.
On very rough numbers 8x EBITDA seems reasonable perhaps which on CY13 consensus implies about 800p.
Remember the board a while back said the bid would have to be at least 800p for them to put it to shareholders.
However, even when the bid was in play a 10x EBITDA multiple would be punchy: and that is what you need to believe 1,000p.
10x MIGHT be possible for NewsCorp to have paid but only because there were a boat-load of synergies, taking the implied REAL multiple lower.
That said, Sky has always traded very expensively historically. At a premium to peers and the market generally so even with peers on say 8x perhaps somewhere between 8-10x is reasonable.
So anywhere between £8-10, seems about right.
Historically they have traded on 10x in the past (pre-crisis).
When you talk like this is when i really have NO IDEA what i'm talking about.That is what they do.
In this case, since July 4th any arb fund worth its fee would have been getting the hell out of dodge with regard to BSY.
I call these guys "forced sellers".
It often leads to an artificially depressed price which is why BSY might be interesting.
However, the question is what BSY is worth standalone - no bid.
On very rough numbers 8x EBITDA seems reasonable perhaps which on CY13 consensus implies about 800p.
Remember the board a while back said the bid would have to be at least 800p for them to put it to shareholders.
However, even when the bid was in play a 10x EBITDA multiple would be punchy: and that is what you need to believe 1,000p.
10x MIGHT be possible for NewsCorp to have paid but only because there were a boat-load of synergies, taking the implied REAL multiple lower.
That said, Sky has always traded very expensively historically. At a premium to peers and the market generally so even with peers on say 8x perhaps somewhere between 8-10x is reasonable.
So anywhere between £8-10, seems about right.
Historically they have traded on 10x in the past (pre-crisis).
walm said:
Cheese Mechanic said:
If Roop gets lawsuits in the US , it could cost him a fortune, which means a brave buyer could get shares really cheaply. Bit of a gamble, but perhaps a good return in time...with luck.
And how exactly would US lawsuits affect BSkyB?You do know what the first B stands for right?
walm said:
Cheese Mechanic said:
If Roop gets lawsuits in the US , it could cost him a fortune, which means a brave buyer could get shares really cheaply. Bit of a gamble, but perhaps a good return in time...with luck.
And how exactly would US lawsuits affect BSkyB?You do know what the first B stands for right?
twinturboz said:
Playing devils advocate here but if News corp was forced to sell it's existing 39% holding, then that could put some downward pressure on bsy shares.
Yes but it also puts the company in play.....at the moment there is a 40% shareholder who wants to buy the company but can't. If they are forced to sell I think you'd get plenty of people lining up to take them out rather than the shares being placed in the marker.....my guess is that a controlling interest like that would trade at a premium not a discount.Gassing Station | Finance | Top of Page | What's New | My Stuff