Selloff risk sparks Sky dividend
The risk that Rupert Murdoch's News Corporation could sell its 43 per cent stake in Sky Television at short notice motivated Sky's pre-Christmas $25 million special dividend to shareholders.
Sky chief executive John Fellet said though he did not have any information about News Corporation's plans, Todd Communications' sale of its 11 per cent holding last November showed how easily it could be done.
"All of a sudden I started thinking about News Corp and that if Todd got their shares away [so easily] then I could not prevent News Corp from wanting to sell out."
News Corporation is demerging its global television and newspaper businesses, but has increased ownership of Australian pay-television firm Consolidated Media Holdings, including 100 per cent of Fox Sports Australia and half of Foxtel.
It has done similar deals with ESPN Star Sports in Asia and Fox Pan American Sport, sparking speculation over what it has planned for Sky.
Fellet said if a major shareholder such as News Corp sold overnight, Sky would not be able to issue imputation credits to remaining shareholders on any dividend payments in the next year.
It therefore decided to issue the special dividend of 32 cents a share. Some 12.4c is subject to imputation credits. It paid a 25c-a-share special dividend in June 2011.
Its total dividend payout in the last financial year was 54c a share. Sky shares closed at $4.89 yesterday.