value, page-23

Flying today. Takeover price at PE9.5 is $1.46. at PE11 it's $1.8.

from a dividend perspective the SP should be $1.5-$1.6 soon.

 We think SXL looks the most accretive opportunity for NEC: While it would not be a simple transaction to execute on, theoretically an acquisition of SXL by NEC would stand out as highly value accretive for both parties and a good strategic fit for NEC in our view by delivering it a unique national radio and TV platform. The value accretion would mostly stem from an “arbitrage” of existing affiliate arrangements given Nine’s strong ratings and the weakness at Ten. We estimate that this “arbitrage” would represent around $55m in EBITDA at current ratings levels, while other synergies (corporate, sales) would take total synergies to $70m. Accordingly, if Nine were to theoretically acquire SXL’s assets at 9.5x EBITDA, we would see it being 28.3% accretive to NEC on a pro-forma basis, while implying a $1.46/sh price for SXL (27% above the last close of $1.15). A possible win-win if it were to potentially occur.
 Not all scenarios are rosy for SXL: On the flipside, it is possible that either the reach rules don’t change, or that NEC extends its relationship with WIN (either by acquisition or affiliate agreement). In this position, SXL would remain exposed to TEN’s programming, and also would leave it to deal with TEN’s management/owners to reach new arrangements going forward.