Archive for category: SBS Broadcasting

Disney (DIS) continues to act better than any other mega cap media stock. I think there are three reasons behind the good action. First, Bob Iger has clearly laid out a content driven strategy and acted to make it happen by divesting radio and acquiring Pixar (PIXR). Second, all of DIS’s divisions will be growing in sync beginning in the June quarter driving the fourth consecutive year of double digit growth. Third, the halo effect of bringing PIXR and Steve Jobs aboard is exciting investors. The strategic coherence implied by these factors is not evident at any other large cap media company at the moment. I expect DIS to continue to be the best performing stock in the large cap group.
Speaking of PIXR, yesterday the company reported better than expected December quarter earnings. I did not listen to the conference call but numerous analyst reports indicated that Steve Jobs said this would be the company’s last earnings report as an independent company. DIS has talked of a summer closing to the deal. I guess late June must be the target now, probably June 30th to make the financial reporting easier to digest….

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I received the circular on the buyout of SBS Broadcasting (SBTV) earlier this week and based on my reading I am continuing to hold the shares owned by clients hoping for another bidder to emerge. As a reminder, SBTV has agreed to a buyout offer from private equity investors led by European group Permira and supported by KKR. The buyout is structured as an asset sale and will pay SBTV shareholders

SBS Broadcasting (SBTV) shares jumped about 8% on Monday after a website reported that the company had held “informal discussions” with an unnamed suitor. The story said that a spokesman for SBS had no comment on rumors or speculation.
I think a takeover of SBTV is plausible and while the primary reason behind my bullish view of SBTV being has been based on fundamentals, I have noted that a sale of the company was possible. Rumors of a possible sale of SBTV first surfaced a month ago when a European analyst noted in a research report local media reports about takeover speculation. Here is what I posted on the blog at that time….

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SBS Broadcasting (SBTV) reports after the close tomorrow followed by a Friday morning conference call. I remain long SBTV and expect another strong earnings report. The shares look very attractive and are my #1 pick in media at the moment.
SBTV’s 1Q05 earnings report was very strong. However, despite repeated leading questions from analysts the company refused to raise its full year guidance. I except the 2Q05 results to firmly indicate guidance is too low. Whether management continues to play it conservative is impossible to know. Current guidance calls for 138 million euro in EBITDA while my spreadsheet and 1Q05 results indicate mid-140s is more likely….

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SBS Broadcasting(SBTV) reported excellent first quarter earnings on Monday. Driven by better than expected organic revenue growth in the company’s television operations, EBITDA exceeded estimates coming in at 8.1 million euros. Management affirmed prior guidance for 138 million euros EBITDA for 2005. On the call analysts asked many questions that tried to get management to admit guidance was low. Management did not bite despite noting that the strength in TV is continuing, as they believe it is still too early in the year to raise guidance given limited visibility. I continue to think guidance is low and stick by the 145 million euro figure in my spreadsheet. I added to holdings in SBTV on Monday for new clients or to build positions for those who already owned SBTV…..

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