Hedge fund manager Crispin Odey argues that Sky (LON:SKY) should fetch a higher price following Disney’s $52 billion deal with Twenty-First Century Fox, Reuters has reported. The massive deal, announced last week, comes amid Fox’s ongoing efforts to take full control of the London-listed pay-TV company.
Sky’s share price has climbed into positive territory in today’s session, having added 0.79 percent to 1,026.00p as of 14:30 GMT, outperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.28 percent higher at 7,511.62 points. The group’s shares have added a little over three percent to their value over the past year, as compared with about a seven-percent rise in the Footsie.
Odey comments add to concerns
Reuters reported today that hedge fund manager Crispin Odey had argued that Sky could fetch a higher price following the Disney-Fox deal announced last week. Fox agreed last December to buy the 61 percent of the UK group that it does not already own for £10.75 per share. The US group’s existing 39 percent stake, however, is now part of a wider package of film, television and international assets being sold to Disney.
“Basically, here is Fox being bought-out on 12 times cashflow,” Odey, whose hedge fund is a 0.9 percent investor Sky company, told Reuters. “If we [Sky shareholders] were being sold on 12 times cashflow we’d be at 12.30 pounds.” The newswire notes that Odey joins fellow small shareholder Polygon in questioning the takeover of the FTSE 100 company in the wake of the Disney deal.
Analysts on Sky
Liberum Capital reiterated its ‘buy’ rating on Sky today, valuing the shares at 1,060p, while Credit Suisse continues to see the pay-TV giant as a ‘neutral,’ with a price target of 1,075p on the stock. According to MarketBeat, the FTSE 100 company currently has a consensus ‘hold’ rating and an average price target of 1,067.13p.