You are using an older browser version. Please use a supported version for the best MSN experience.

Sky TV to pay early dividend

NZ Newswire logoNZ Newswire 30/01/2017 Paul McBeth
Sky © BROKER/REX Shutterstock Sky

Sky Network Television will pay an early interim dividend ahead of the planned merger with Vodafone New Zealand and raise the cash portion of its acquisition of the telecommunications carrier to reflect a bigger return than their agreement provided for.

Auckland-based Sky TV will pay 15 cents per share, or $58.4 million, on February 22 to shareholders on the register on February 15, it said.

The announcement was released ahead of Sky TV's first-half result to enable a return to shareholders ahead of the planned transaction with Vodafone.

Last month, Sky TV warned earnings before interest, tax, depreciation and amortisation for the year ending June 30, is expected to be 5-7 per cent below the $296m forecast it gave in June. It paid an interim dividend of 15 cents in 2016.

The merger would see Sky TV buy Vodafone NZ for $3.44 billion, funded by a payment of $1.25b in cash and the issue of new Sky TV shares at a price of $5.40 per share. Vodafone becomes a 51 per cent majority shareholder in Sky TV, in what amounts to a reverse takeover. The pay-TV operator will borrow $1.8b from Vodafone to fund the purchase, repay existing debt and use for working capital.

The agreement allowed for an interim dividend of up to 10 cents per share and the two companies have agreed to alter the deal to allow the larger return.

The amendment means Sky TV's cash portion of the Vodafone acquisition will increase to reflect the 5 cents per share difference.

The transaction still needs Commerce Commission approval.

Sky TV shares last traded at $4.68.

image beaconimage beaconimage beacon