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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
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.
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.&rdquo