SKY Network Television Limited (NZSE:SKT) says it will not be proceeding with the acquisition of Mediaworks Holdings Limited. In a statement, the pay TV operator said that it "has ceased discussions to evaluate the possible acquisition" of MediaWorks. "As previously communicated, in parallel with its evaluation of potential investment opportunities, Sky has been exploring options to return capital to shareholders and accelerate organic investment in the business to drive further growth," the company said.

Shareholders will be updated on its capital management plan by the time of the company's full year results announcement on August 25, Sky said. "Sky remains committed to restoring regular dividend payments, having returned to revenue growth and achieving sustainable levels of free cash flow," the statement added. The pay TV company said in February that it was assessing opportunities to invest capital to accelerate the growth of the business, generate new revenue streams, and deliver improved returns for shareholders.

It said at the time that the possible acquisition of MediaWorks was consistent with this strategy. Earlier this month, Sky confirmed it was in talks to buy MediaWorks. However, investors reacted negatively - driving down Sky TV's share price 7.2%following the announcement.

The stock closed on 15 June 2022 at $2.25. Institutional investors are understood to have pushed back against the notion of a MediaWorks deal in favour of an alternative acquisition or another method of spending cash such as a share buyback. Share market analysts were also puzzled by Sky's announcement it was courting MediaWorks.