Sky (SKY) has agreed to sell four-fifths of Sky Bet to CVC Capital Partners for £600m in cash, with a further £120m up for grabs if the gambling business performs. The Pay-TV titan may use the proceeds to pay down its debt, which has ballooned to £6.3bn following its recent acquisitions of Sky Italia and Sky Deutschland.
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However, Sky is hiving off one of its fastest-growing businesses. Sky Bet's sales rose 18 per cent to £182m last financial year, and accounted for a fifth of the group's first-quarter revenue growth.
Broker Investec Securities thinks the deal could lower Sky's EPS in 2016 by 2 per cent. It forecasts full-year pre-tax profit of £1.23bn, giving EPS of 55.9p, rising to £1.51bn and 67.8p (from £1.19bn and 59.4p in 2013).