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Interesting report today, Oct 14 shown on Skyreport.com. http://skyreport.com/#story3 Copy as follows: Street Eyes DirecTV/News Corp. LatAm Deal


What does Wall Street think of the satellite TV moves in Latin America for DirecTV and News Corp.?

(For the story on DirecTV and News Corp.'s transactions involving their satellite TV platforms in Latin America, see: http://www.skyreport.com/viewskyreport.cfm?ReleaseID=1503


Analysts doing some Monday morning quarterbacking pointed to DirecTV's belief that the reorganized Latin American platforms have the critical mass to succeed. While DirecTV management may have been quiet on objectives and synergies, those on Wall Street highlighted key points tied to the future of the Latin American satellite TV operations: 5 million subscribers are targeted within the next three to five years, and the venture is expected to be cash flow positive by 2005, excluding $100 million to be spent on set-top box conversions.


Wall Street embraced the Latin American moves, yet some suggested the transactions were not as big of a deal as expected.


"We have always been optimistic about Latin America's DTH potential, given the low cable penetration rates and potential to grow in line with the still emerging economies," William Kidd of Vintage Research said. "However, this transaction shows News Corp.'s willingness to keep considerable value at News Corp, and the dept and losses at DirecTV."


Tom Watts of Oppenheimer and Co. said the DirecTV/News Corp. transactions involving the Latin American satellite TV platforms are a neutral event for DirecTV. "Although the conversion of the two operations onto one platform provides potential for significant improvement in operating metrics, we do not see strong strategic advantage to DirecTV in consolidating these Latin American assets," he said in a research note.


Richard Greenfield of Fulcrum Global Partners also said the deal is a neutral one for DirecTV, but a positive for News Corp. He said the deal removes "unconsolidated, complicated joint ventures that were losing money from News Corp.'s balance sheet for cash in DirecTV. Given that News Corp. is receiving $496 million in cash, the value of the transaction implied for News Corp. (including the dept assumed) is about $800 million," he said.
 
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