UK satellite pay-TV leader Sky – which is also the country’s second largest broadband ISP by retail customers – has privately sought to dampen criticism of the terms of a buyout bid agreed last Friday under which US media giant 21st Century Fox aims to acquire the 61% of Sky shares it does not already own, the Financial Times (FT) reports. Fox – controlled by media tycoon Rupert Murdoch – has tabled an offer which values Sky at GBP18.5 billion (USD23.2 billion), worth GBP10.75 per share in cash, a premium of 36% on the closing price on 8 December. Sky reportedly contacted its top ten shareholders about the proposed terms over the weekend, with one person close to the discussions quoted by the FT as saying that investors were ‘pretty sanguine’ about the proposed price, but that they would ‘always like the offer to be worth more’, whilst two smaller shareholders, Jupiter Asset Management and Royal London, have raised concerns about the offer pricing. On Monday, Thomas Moore, investment director at Standard Life Investments, with a 0.26% Sky stake, questioned the bid, telling the BBC: ‘We would hope this is a starting bid and on reflection they will appreciate that a higher bid is more appropriate.’
Sky said that the independent directors of both companies had reached agreement on the offer price, but added that ‘certain material offer terms remain under discussion’, whilst according to news agency Reuters’ calculations, Fox would pay GBP11.25 billion for the stake in Sky that it did not already own. Another report from the BBC notes that British sterling’s 16% fall against the US dollar in the wake of the Brexit vote has made UK companies more attractive targets for foreign companies such as Fox.
Fox is required to ‘clarify its intentions’ by 6 January, or walk away for at least six months under UK takeover rules. People working with Fox have expressed optimism that the deal will clear multiple regulatory hurdles at the UK and European level and that there are no plans for the Sky News division to be detached from the business. If a formal deal is announced, UK culture secretary Karen Bradley will have ten days to decide whether to ask media and telecoms regulator Ofcom to review the deal, the FT notes.