Sky Network and Vodafone MergerPage | 1Report to the existing and prospective stakeholders of the company Company backgroundThe company sky was founded more than two decades back and has as of now become theNew Zealand’s largest television network providers in the world. The company has been ableto make growth in the last two decades and has grown from the team of 10 people to a teamof 1000 people working in New Zealand. The chairman of the company is Peter Maourt. TheJohn Fellet is the Director and Chief Executive Officer of the company (Sky.co., 2016).Business Performance Overview The company is registering excellent growth in terms of revenue for the past several years. Inthe year 2016, the company was able to register $928 million revenue over $927 millionrevenue in the year 2015. The company has made a huge leap in revenue from the year 2014where its revenue was $909 million. Below is the chart of revenue performance of thecompany (skynz.akamaized.net, 2016) -Yearrevenue ($ millions)20128432013885201490920159272016928In terms of Average return per unit of the company, the growth is registered there too. Thiscan be seen as produced in the table below (skynz.akamaized.net, 2016) –YearAverage return per unit ($)201271.93201375.83201477.52
Sky Network and Vodafone MergerPage | 2201579.54201681.67Hence, it can be seen that company is making huge progress in terms of return as well.Why mergerIn the recent past few months, the company has been under pressure due to intensecompetition after the arrival of Netflix. The shares of the company have also fallen to anextent of 28 %. Even though the revenue of the company has been rising but the pressure onits traditional business was mounting which has started to erode the traditional business of thecompany. The market reports have suggested that the number of subscribers of the companyhave begun to reduce which is a worrying sign for the company’s future. In the first half ofthe year, the company had been questioned by the investors several times regarding thestrategy of the company to deal in the changed market scenario (Morrison, 2016). Thecompany on the other hand had been looking for better capital management strategies and theinvestors to boost up the business of the company. The company also appointed Citigrouprecently to take advice on the capital management strategies and how to steer the companyout of the ongoing crisis.Merger with Vodafone NZThe company over the past few months has been looking to make a deal with the Vodafoneof Britain to provide the premium entertainment content to the subscribers in New Zealand.The company will be able to provide wide network of television content as reasonable prices.The merger is assessed to complement both the Vodafone and the sky television networkalike. The company has recently struck deal with Vodafone NZ for a total of $2.4 billion. Rationale of the merger deal is studied under the following aspects –
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