Shares in Sky leapt more than 5% this morning on the back of a weekend report suggesting that the Murdoch family had rejected two approaches for its stake.
The news has fuelled speculation that conglomerate 21st Century Fox, which has a 39.1% holding…
Shares in Sky leapt more than 5% this morning on the back of a weekend report suggesting that the Murdoch family had rejected two approaches for its stake.
The news has fuelled speculation that conglomerate 21st Century Fox, which has a 39.1% holding in Sky, will either seek full ownership of the British broadcast and broadband giant, or is preparing to sell up.
Vivendi’s largest shareholder, Vincent Bollore, made the most recent informal approach to Fox earlier this year, but talks ended quickly due to differences over valuation, according to The Sunday Telegraph, which cited City sources.
The Murdochs reportedly demanded £18 per share, which represented a 73.4% premium on Sky’s £10.38 closing price on Friday.
Vodafone, which reportedly made an enquiry of its own last year, was quoted a similar price, according to the article.
Vodafone’s shares spiked 5.6% this morning, but have since calmed and are trading around 3% above where they were at the end of last week.
The report suggested the rejections signalled that Fox could be gearing up to launch another buyout offer for the shares in Sky it does not already own. A previous attempt was withdrawn in 2011 due to political pressure following the News of the World phone hacking scandal.
In a memo to investors, however, analysts at Liberum disagreed with this analysis: “The fact that the talks reportedly broke down over price rather than the principle of selling the stake suggests the Murdochs are open to a deal.”
Liberum’s note argues that a buyout offer is now less likely, since fellow Sky shareholders would demand the £18 per share price Fox quoted Bollore. Fox, they believe, would be unlikely to pay that premium.
Last November, Sky closed acquisitions of Sky Italia and Sky Deutschland to become a pan-European pay-TV operator. This comes as telecoms operators across the continent are increasingly following a quad play strategy.
In Italy, Sky is reportedly looking to expand its DTH offering. A report in Corriere della Sera last month said that Sky Italia and fellow broadcaster Mediaset were negotiating a potential joint venture, which would combine both groups’ pay-TV operations and be majority-owned by Sky. Whether Italy’s antitrust watchdog would allow such a transaction, which would create a monopoly in the sector, remains to be seen.
