jon wrote:What I didn't know, until I read the Broadcast Dialogue story this morning, is that Stingray already owns TV Specialty Channels:
Stingray Digital Group has announced its intention to acquire Newcap Radio owner Newfoundland Capital Corporation for $506 million, including the assumption of net debt of approximately $112 million. Subject to regulatory and shareholder approval, Montreal-based Stingray will pay $14.75 per share, payable in a combination of cash and Stingray shares. Headquartered in Dartmouth, NS, Newfoundland Capital is the second-largest radio licence holder in the country, employing about 800 radio professionals. Newcap’s 82 FM and 19 AM radio licences would mark a major addition to Stingray’s lineup of specialty television channels and multiplatform music and video services. Going forward, the Steele family would hold five per cent of the merged company with Newcap president & CEO Rob Steele remaining on the Stingray board.
Wow, I'm surprised you didn't know about that, jon. I believe Stingray acquired several former Much Music specialty TV channels as part of a required divestiture by Bell for their acquisition of Astral Media. As expected, I think Stingray made the
better buy, compared to DHX Media's buy of Family Channel and related specialty TV channels from Corus, and I think this is a great fit.
The move surprised me because NewCap seems to be one of the best national radio station operators. Will there be job losses? I don't know, but
not likely because of this deal (other than duplicative head office-type jobs). Any on-air talent and/or production job losses would've likely already been in the works by NewCap as Stingray owns
no radio stations.
At first, I was wondering whether I should put in a commission-free order, at $10.40 per subscription receipt, for Stingray Digital Group or just buy it on the open market. It seems the market doesn't like this deal and I'm not sure why. Yes, they're adding 13 million common shares, but they also expect this deal to be 30% more accretive in earnings per share and the company is doubling in size. What am I missing!? This seems like the best way to finally own a pure-play, as best as can be expected, radio station group, with optionality in the music streaming service.
I'm actually even more bearish on Sirius XM in Canada now. Stingray can unite the radio stations under the Stingray brand, simplify their corporate structure, and create a national combined online streaming service featuring terrestrial radio stations and Internet music streams. Why would I pay $20+ plus taxes per month, per radio receiver, for satellite radio when I can get ad-free or ad-minimalist radio for free? As cellphone companies strike deals with companies like Bell Media and Stingray to exclude Stingray or Bell radio streams from Internet data consumption, satellite radio becomes wholly irrelevant.
Cheers,
Doug