UK DTH provider BSkyB has priced £3.25bn (US$5.24bn) of euro and US dollar denominated bonds to help fund its takeover of sister companies in Italy and Germany.
The bonds were priced at marginal discounts to support its deal with Rupert Murdoch’s…
UK DTH provider BSkyB has priced £3.25bn (US$5.24bn) of euro and US dollar denominated bonds to help fund its takeover of sister companies in Italy and Germany.
The bonds were priced at marginal discounts to support its deal with Rupert Murdoch’s 21st Century Fox to buy all of Sky Italia for £2.45bn (US$4.16bn), as well as a 57.4% stake in Sky Deutschland for £2.9bn (US$4.92bn).
They follow a £6.6bn (US$11.2bn) loan package that BSkyB secured back in July to also help fund the acquisitions.
The new senior unsecured notes come in four tranches: €1.5bn (US$1.94bn) due 2021 with a 1.5% coupon and priced at 99.585%, €1bn (US$1.29bn) due 2026 with a 2.5% coupon and priced at 99.703%, US$750m due 2019 with a 2.625% coupon and priced at 99.851%, and US$1.25bn due 2024 with a 3.75% coupon and priced at 99.62%.
Proceeds from the US dollar bonds will be swapped into euros at a cost of 1.3% for the notes due 2019 and 2.4% for those that mature in 2024.
BSkyB said the blended pre-tax cost of the new bonds will be less than 2.5% after certain fees have been paid, reducing its overall pre-tax cost of debt to about 4% per annum.
Barclays, JP Morgan and Morgan Stanley are mandated lead arrangers and bookrunners for the debt facilities. Barclays and Morgan Stanley are also BSkyB’s financial advisers for the deal.
The satellite broadcaster’s expansion drive will create a European pay-TV giant that will serve around 20 million customers.
21st Century Fox, which will continue to own 39% of BSkyB after the deal, was formed last year when it split away from the News Corp publishing firm in the wake of the public backlash caused by the UK phone hacking scandal. That scandal also derailed an attempt by Murdoch at the time to take full control of BSkyB.
Chase Carey, 21st Century Fox’s COO, was cited telling the Royal Television Society’s conference yesterday that it had no plans to resurrect its bid to buy the rest of BSkyB.
Elsewhere in Europe’s pay-TV industry, Dutch newspaper De Telegraaf recently reported that US media giant Discovery Communications is looking to continue its acquisition spree by snapping up SBS Broadcasting, the commercial TV provider in the Netherlands that is behind the SBS 6, Net 5 and Veronica channels.
Discovery and SBS declined to comment.
*Update: 11 September 2014*
The European Commission approved BSkyB’s Sky Deutschland and Sky Italia’s acquisitions on 11 September, after deciding that they would not raise competition concerns.
The deals are still subject to other regulatory approvals, as well as the nod from BSky’B’s independent shareholders.
