BSkyB directors reject News Corp proposal
Speculation is rife that News Corp will succeed in a bid to buy a controlling stake in UK satellite broadcaster BSkyB, despite the fact no formal offer has been made.
The broadcaster says News Corp’s proposal would need to clear regulatory and financing pre-conditions before a formal offer can be made, which makes the timing of such an offer uncertain.
Independent directors led by Nicolas Ferguson have already rejected the proposed £7.8 billion (€9.3 billion) offer News Corp made to purchase the 60% of BSkyB it doesn’t already own.
“It is the unanimous view of the Independent Directors that there is a significant gap between the proposal from News Corporation and the value of the company,” Ferguson said, adding that BSkyB “has a track record of very strong performance and excellent growth prospects.”
News Corp investors have been kinder, backing the proposed deal as a step towards consolidating broadcast operations in Europe, FT.com reports.
The purchase of BSkyB could clear the way for a similar deal at Sky Deutschland, and open the possibility of merging the UK and German operations with Sky Italia, which News Corp already controls, the paper states.
Even without the cross-Europe tie-up, BSkyB makes an attractive proposition.
Profits are forecast to hit £1.1 billion in the next two years, but the main benefit would be lessening News Corp’s reliance on advertising revenues by leveraging the broadcaster’s more diverse sources of income, The Telegraph reports.
There would also be lucrative cross-selling opportunities with News Corp’s other media assets, the paper said.
Despite rejecting the proposed 700 pence per-share price, BSkyB said it will cooperate with News Corp in securing the necessary regulatory clearances for a deal.