Sky Deutschland AG declines to recommend British Sky offer
17 Sep 2014
Sky Deutschland AG said it could not recommend to its investors a buyout offer by British Sky Broadcasting Group Plc, as it found the price agreed by 21st Century Fox Inc, its controlling shareholder, was too low, Bloomberg reported.
The German pay-TV provider's management and supervisory boards, after considering an assessment by Merrill Lynch & Co, agreed that the €6.75 per-share offer for the balance 42.6-per cent of Sky Deutschland did not reflect the company's ''long-term potential and therefore its inner value,'' , according to a statement on the German company's website.
The report did not say how much Sky Deutschland shares should be worth. The stock traded at €6.74 in Frankfurt.
In July, BSkyB agreed to pay £2.9 billion for Fox's 57.4 per cent in Sky Deutschland as part of a larger transaction to transfer Fox's German and Italian pay-TV assets to BSkyB.
The deal gained approval of European regulators last week. Thanks to Fox's agreement, the opposition by Sky Deutschland's boards would not prevent an ownership change (See: BskyB offer for Sky Deutschland rejected by major shareholder).
The deal with Fox would transform Isleworth, England-based BSkyB, 39-per cent owned by Fox, into a European satellite and cable service with almost 20 million subscribers.
BSkyB in July agreed to pay $9 billion (£5.52 billion) for the acquisition of Rupert Murdoch's pay-TV companies in Germany and Italy, extending its growth into Europe by creating a media giant with 20 million customers (BSkyB acquires Fox's pay-TV assets in Germany and Italy for $9 bn).
"The Management Board and the Supervisory Board believe that the consideration offered by the bidder does not reflect the full potential and thus intrinsic value of Sky Deutschland's business," Sky Deutschland said in a statement.
