Fox’s offer of £10.75 a share represents a premium of around 40% to the closing price of £7.69 per Sky share on December 6, the last business day before the initial proposal was received by Sky from Fox.
It also represents a premium of around 36% to the closing price of £7.90 per Sky share on December 8, the last business day before the start of the offer.
Furthermore, it is a multiple of around 11.4 times Sky Adjusted EBITDA of £2,178 million for the 12-month period ended June 30, 2016.
21st Century Fox now anticipates the acquisition will be completed before the end of 2017.
Commenting on the Acquisition, 21st Century Fox said: “As the founding shareholder of Sky, we are proud to have participated in its growth and development. The strategic rationale for this combination is clear. It creates a global leader in content creation and distribution, enhances our sports and entertainment scale, and gives us unique and leading direct-to-consumer capabilities and technologies. It adds the strength of the Sky brand to our portfolio, including the Fox, National Geographic and Star brands.
“Sky is a creative, commercial, and consumer powerhouse delivering its own content to customers across all platforms. Sky is the number one pay-TV brand in all its key markets, with an exciting growth runway in each. The enhanced capabilities of the combined company will be underpinned by a more geographically diverse and stable revenue base. It will also create an improved balance between subscription, affiliate fee, advertising and content revenues. This combination creates an agile organization that is equipped to better succeed in a global market.”
Martin Gilbert, deputy chairman of Sky, added: “I am enormously proud that Sky is the number one premium pay TV provider in all its markets and is recognised as a world leading direct-to-consumer business. On top of this, the business has an outstanding track record of growth and has delivered substantial value for its shareholders over many years.
“The Independent Committee, which was formed with the express purpose of protecting independent shareholders’ interests in relation to the proposal from 21st Century Fox, has given full consideration to the fundamental value and prospects for the Sky Group.
“While the Independent Committee remains confident in Sky’s long-term prospects, as laid out in detail at our recent investor day in October, we, supported by our advisers, believe 21st Century Fox’s offer at a 40% premium to the undisturbed share price will accelerate and de-risk the delivery of future value for all Sky Shareholders. As a result, the Independent Committee unanimously agreed that we have a proposal that we can put to Sky shareholders and recommend.
“The Independent Committee also notes 21st Century Fox’s track record in growing businesses and its ability to continue the development of Sky across Europe, in a world where entertainment and distribution are converging. 21st Century Fox’s ownership will support the delivery of Sky’s strategy and long-term growth, ensuring that it remains at the forefront of Europe’s creative industries.”
As previously reported by Broadband TV News, the bid from Fox was originally received by Sky last week.
The deal, which will give Rupert Fox complete control of Sky, will nevertheless require regulatory approval.
Some local reports say that it may also require an investigation by Ofcom.