Sky Deutschland Falls as Merrill Sees Online Competition
Sky Deutschland AG (SKYD), the German pay- TV operator part-owned by News Corp. (NWSA), fell the most in almost six months after Bank of America Merrill Lynch analysts said Web-based competition poses a risk to growth and stock gains.
Sky Deutschland dropped as much as 5.6 percent, the biggest decline since July 23, and was trading down 4.2 percent at 4.45 euros at 12:32 p.m. in Frankfurt. Volume exceeded the three- month daily average by more than 75 percent, and the stock was the worst performer on the 50-company mid-cap MDAX Index.
A stock-price boost from a possible bid from News Corp. for full control may be offset by “execution risks,” while increases in subscriptions to a bigger proportion of households may be curtailed by competitors such as ProSiebenSat.1 Media AG (PSM)’s MaxDome service, which offers access to programs via the Web, Merrill Lynch analysts, including Daniel Kerven in London, said in a research report.
The analysts cut their recommendation on Unterfoehring- based Sky Deutschland to neutral from buy. They raised their stock-price estimate to 4.80 euros from 4 euros.
Sky Deutschland was the highest price since October 2008 in the four trading sessions through Jan. 9 after signing an agreement a week ago to sell subscriptions to Internet-based TV customers of Bonn-based phone company Deutsche Telekom AG. (DTE) That contract will give viewers access by mid-2013 to soccer matches played by Germany’s Bundesliga and the UEFA Champions League, as well as the Sky Film channel.
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