Fox Adds To BSkyB Portfolio, Monies Needed For Time Warner Bid

Looking for more financial wherewithal to compete for Time Warner, 21st Century Fox will transfer equity stakes in European satellite businesses in Italy and Germany to its controlled BSkyB -- getting $7.2 million in cash.

Fox will create a bigger Pan European digital satellite broadcaster with 2 million subscribers. Fox will transfer Sky Italia and its 57.4% interest in Sky Deutschland to BSkyB. BSkyB is the largest pay-TV broadcaster in the UK and Ireland with over 10 million subscribers.

The cash resources are expected to help the deal to help pursue Time Warner -- where an initial bid of $80 billion was made recently and rejected. Analysts estimate that bid -- valued at around $85 a share for Time Warner -- will go higher, perhaps just short of $100 a share.

Fox will receive about $9.3 billion in value from BSkyB -- approximately $8.6 billion in cash and BSkyB’s 21% interest in National Geographic Channels International, giving Fox a 73% interest in those channels. Fox will buy about $900 million of additional shares in BSkyB to maintain its 39.1% stake.

In referencing the possible Time Warner transaction -- and Fox continued share buyback program -- Rupert Murdoch, chairman/chief executive officer of 21st Century Fox, stated: “Our renewed authorization for our share buyback program will be executed regardless of any potential acquisition or investment activity by the company.”

James Murdoch, co-chief operating officer of 21st Century Fox, said: “Ultimately, a pan-European Sky is good for customers, who will benefit from the accelerated technological innovation and enhanced customer experience made possible by a fully integrated business.”
Tags: europe, m&a, tv
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