Sky directors expect News to pay more
SOURCES close to BSkyB’s independent directors were last night calling for Rupert Murdoch to pay at least £9 per share to take full control of the satellite broadcaster.
The same sources also indicated that a price of up to £10.40 a share, as called for by Crispin Odey, the founder of Odey Asset Management and one of the largest investors in BSkyB, was “unrealistic”.
One source close to BSkyB’s independent directors told City A.M.: “The game has moved on significantly since News Corp made its initial offer of £7 per share last year, and I think a price of £9 per share is wholly realistic, but it is unlikely that any price much higher than this is achievable.”
Odey, who holds a 2.7 per cent stake in the broadcaster, defended his valuation of BSkyB at £19bn, as the company reaps the benefits of technology-fuelled growth. At that price, News Corp would have to pay £10.40 a share to take full control, or £11.6bn.
“I just want to make sure Murdoch doesn’t get [BSkyB] too cheaply,” Odey told City A.M., highlighting the potential for growth in the broadcaster’s subscriptions business. The positioning by BSkyB’s investors comes ahead of the expected go-ahead for the takeover by culture secretary Jeremy Hunt this week, subject to a further consultation.
News Corp, which last year made a £7.8bn offer for the 61 per cent of BSkyB it doesn’t already own, has stated it will not be forced into overpaying for the satellite business.
News Corp will be hoping to get a recommendation from the Sky board for whatever improved offer it puts to the company. The first offer was rejected out of hand as undervaluing the group, which is headed up by chief executive Jeremy Darroch.
TIME LINE | MURDOCH’S BID TO TAKE CONTROL OF BSKYB
● June 2010: BSkyB rejects a £7.8bn offer from News Corp for the shares it does not already own in the company.
● 11 October 2010: A group of media companies form an alliance against the bid, including BT, Channel 4, the Guardian, Daily Mirror, Daily Mail and the Daily Telegraph. They write to Vince Cable, the business secretary, calling on the government to block the merger.
● 3 November 2010: News Corp tells the European Commission of its intention to take full control of Sky. Vince Cable issues an intervention notice the next day and asks Ofcom to investigate the merger on grounds of media plurality.
● 21 December 2010: The European Commission clears the merger on competition grounds. On the same day, Vince Cable is found to have told reporters from the Daily Telegraph he had “declared war” on Rupert Murdoch, and is stripped of responsibility for overseeing the merger. Culture secretary Jeremy Hunt is handed the brief.
● 18 January: News Corp raises the suggestion of spinning off Sky News upon completion of the merger in order to satisfy media plurality.
● 25 January: Hunt says the merger could harm media plurality, but stops short of referring it to the Competition Commission. He says he will further examine the Sky News spin off plan.
● 16 February: News Corp responds with a revised plan to spin off Sky News. Hunt writes to the OFT and Ofcom asking for advice on the proposals.
● 3 March: Hunt approves News Corp’s plans to sell Sky News, clearing the way for the BSkyB takeover.