Publishing & Broadcasting Update

Submitted by Craig Strzelecki on 9 May, 2007 - 19:52

Publishing & Broadcasting have made the decision to split the entity into Gaming and Media, which will unlock the inherent value within the Gaming assets, and should also, pending improved disclosure, allow a better appreciation of growth potential in new Media investments. Net $2bn cash from the recent sale of PBL Media will remain with Crown, giving it the flexibility to rapidly pursue additional Gaming investments. Sum-Of-The-Parts Low-Balls The Value; sharemarket analyst's Citigroup Investment Research's current PBL SOP is $21.40, comprised of Crown $13.82, Consolidated Media Holdings at $3.99, Hoyts and New Regency at $0.53, and Cash at $3.06. CIR added recent Gaming transactions at 10% discount to cost. PBL's stake in MPEL is carried at 25% discount to ADR's, making PBL the cheapest entry to Macau Gaming in the analyst's coverage universe. Despite today's rally, PBL still trades at a discount to global Gaming peers. Further International Gaming Acquisitions Most Likely; A bid for Tabcorp at current levels is inhibited by the premium TAH trades at relative to PBL, and the "poison pill" of the Victorian Gaming and Wagering License. The analyst also rules out a bid for Sky City; the assets are not sufficiently material, attractive or cheap. International markets look most prospective. CMH Will Need Funds To Grow; CMH will be left debt and cash-free, but further acquisitions, either in PBL Media or within CMH, will likely require some additional equity to be raised. Split Should Assist Visibility: Investment community has appeared reluctant to ascribe value to Publishing & Broadcasting's commitment to further develop its Gaming interests. The split will improve ability to assess growth potential within each entity.

Publishing & Broadcasting Limited is listed on the Australian Stock Exchange (ASX) under stock code PBL. You can view their investor website here. PBL was listed on the ASX on 4 June, 1987. James Packer is the Executive Chairman and the managing director is John Alexander. Publishing and Broadcasting (PBL) is involved in gaming and entertainment; television production and broadcasting; magazine publishing and distribution; investments in the internet, pay television; telecommunication and other media and entertainment sectors. Find out the meaning of the recommendations in this primer. Browse for other stockbroker recommendations. You can use Instalment Warrants to trade PBL. Check your charts and good luck with your share trading!

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