Pay-television broadcaster Sky New Zealand has confirmed it will seek to renew its rights deal with SANZAAR, rugby union’s regional governing body comprising the unions of South Africa, New Zealand, Australia and Argentina, adding that failing to secure the contract would represent a “significant threat to shareholder value”.

In a market announcement, Sky took the unprecedented step of seeking shareholder approval to enter into a five-year deal given the bid would exceed the threshold of NZ$235m (€134.6m/$147.1m), or half the company’s value. The SANZAAR rights package consists of the Rugby Championship national team tournament and the Super Rugby club competition.

Sky currently holds the rights in a contract spanning from 2016 to 2020 and is seeking a further five-year extension from 2021 onwards, but faces strong competition in the domestic marketplace from telco Spark. Sky made the announcement as it requires shareholder approval to bid for the rights under the Companies Act.

The company’s value has reduced by 39% over the past year to NZ$468.2m.

Sky said in a statement: “Failing to acquire the next SANZAAR rights, arguably the company’s most important content asset, represents a significant threat to shareholder value. The company has been synonymous with rugby and sports broadcasting and production in New Zealand.”

Shareholder approval will be sought at a meeting on 17 October.

“This is the first time we’ve taken such a step and it’s due to our current market cap relative to the potential size of the deal,” the broadcaster told the New Zealand Herald. “At our current value, we need to seek shareholder approval for any deal worth over NZ$235m – and, on that basis, even the existing deal would need approval if we were entering into it today.”

It was reported earlier this month that Sky would offer NZ$400m for the next SANZAAR contract spanning 2021 to 2025. This would represent an NZ$10m-per-year increase on the current agreement, but is believed not to be enough to ward off the possibility that the contract could be split between television and online streaming rights.

The next meeting will also see shareholders asked to approve the acquisition of global streaming service RugbyPass in a deal worth up to NZ$60m.