21st Century Fox bids $14.6 bn for Sky Plc
16 December 2016
21st Century Fox, the US entertainment company controlled by Rupert Murdoch, yesterday tabled a firm $14.6-billion (£11.7 billion) offer to buy the remaining 61-per cent it does not already own in British market-leading pay-TV provider Sky Plc.
Fox stuck to its earlier preliminary offer of £10.75 per share, (See: 21st Century Fox tables $14 bn preliminary bid for remaining of Sky Plc) valuing the whole of Sky at £18.5 billion, despite angering several top-50 shareholders of Sky, who believe that the offer undervalues the company.
The offer represents a premium of around 40 per cent on the day before Fox tabled the preliminary bid.
The deal will need to secure regulatory approval in Europe and the UK, and Sky shareholders, several of them, like including Standard Life Investments and Jupiter Asset Management, feel that the offer price is too low.
The transaction agreement entails that Fox must receive 75 per cent of the shares not owned by it and has offered to pay a £200-million break fee if it fails to close the deal.
In the past several years, Fox has said that its exiting 39.1-per cent stake in Sky is not a natural end position and a complete takeover would bring together its global content business with Sky's world-class direct-to-consumer capabilities, which have made it the number one premium pay-TV provider in all its markets.
This is the second attempt by Fox to buy the whole of Sky. Its £7.8-billion offer in 2010 was derailed after it was revealed that two of his newspapers had hacked into the mobile phones of celebrities and politicians, leading to a major scandal.
This failed attempt was made by Rupert Murdoch's News Corp, which has since split into two distinct publicly traded companies, 21st Century Fox and the new News Corporation.
A successful deal would give Fox full control of a pay-TV network spanning 22 million households in the UK, Ireland, Austria, Germany and Italy.
It would also enhance Sky's leading position in entertainment and sport, and reinforce the UK's standing as a top global hub for content generation and technological innovation.
''The strategic rationale for this combination is clear. ''It creates a global leader in content creation and distribution, enhances our sports and entertainment scale, and gives us unique and leading direct-to-consumer capabilities and technologies,'' Fox said in a statement.
''It adds the strength of the Sky brand to our portfolio, including the Fox, National Geographic and Star brands.''