News Corporation bids for full control of BSkyB
15 Jun 2010
News Corporation, owned by media mogul Rupert Murdoch, has moved in to take full control of the UK satellite-television company British Sky Broadcasting Group PLC (BSkyB) as it seeks to buy the remaining stake it does not already own in the UK's largest pay TV provider.
News Corp, which already owns 39 per cent of BSkyB in which Rupert Murdoch's son James Murdoch, the heir apparent of News Corp, is already the chairman, is now seeking to buy the remaining 61 per cent of BSkyB, which is currently valued at £12 billion, the UK media reported yesterday.
Although the bid was tabled last week for an undisclosed sum, citing a source familiar with the matter Reuters reported yesterday that the bid was rejected by the board of BSkyB as being too low.
But battle lines are clearly drawn for a showdown between the Murdoch family and the independent directors of BSkyB.
News Corp, which owns Fox broadcasting, the Twentieth Century Fox movie studios and The Wall Street Journal, is sitting on a cash stockpile $8.2 billion, much of it, accumulated and hoarded during the recession.
But instead of investing the money in growth regions like China, Brazil or India, News Corp has opted to invest in the UK, where not only growth is limited, but the acquisition is surely to be scrutinised closely by the regulators, say analysts.
BSkyB, which had 2009 revenues of £5,323 million, operates Sky Digibox, Sky services that include Sky Digital, Sky Broadband, and Sky Talk and has a total customer base of nearly 10 million as of 31 March 2010.
The Daily Telegraph, which first broke the story yesterday, said that shareholders of BSkyB such as Blackrock, Legal & General and M&G are likely to demand independent judgment on the offer.
