STORY UPDATED AT 12noon CET. Rupert Murdoch is reportedly looking to combine British Sky Broadcasting Group with Sky Italia and Sky Deutschland, by acquiring shares held by 21st Century Fox.
Bloomberg broke the news about a possible combination of the three main European Sky platforms quoting anonymous sources.
According to the report, followed by a similar one in the Financial Times, it is still very early days for such a takeover.
Reacting to these reports, BSkyB has issued a statement on the morning of Monday, May 12. “BSkyB has a clear set of plans to grow its business in the UK and Ireland, is executing these well and expects to continue to achieve excellent growth and returns for shareholders. At the same time, the Company continuously explores ways to create further value for shareholders.
“As part of this approach, the Company initiated preliminary discussions with 21st Century Fox to evaluate the potential acquisition of its pay-TV assets in Germany and Italy. BSkyB believes at the right value, this combination would have the potential to create a world-class multinational pay TV group.
“These discussions have not progressed beyond a preliminary stage, no agreement has been reached on terms, value or transaction structure and there is no certainty that a transaction will occur.
“Any potential agreement would be subject to external factors including the Sky Deutschland share price continuing to trade on an undisturbed basis. BSkyB’s focus in respect of Sky Deutschland would be to acquire 21st Century Fox’s controlling stake (57% on a fully diluted basis). As a consequence BSkyB would be required to make a takeover offer to the public minority of Sky Deutschland in accordance with relevant German legislation. BSkyB would expect, subject to German minimum offer price rules, to make this offer without a premium.
“All Board discussion of this topic is solely within a committee composed of the Independent Directors of BSkyB, in which Directors affiliated with 21st Century Fox do not participate.”
At the moment, Murdoch holds a 39% stake in BSkyB, while Fox holds 57% of Sky Deutschland and 100% of Sky Italia. In 2010 Murdoch tried to take control of BSkyB, but had to drop the bid amid the phone-hacking scandal.
In the UK, Sky had 15 million subscribers at the end of March 2014, while Sky D had 3.73 million subscribers, and Sky Italia had 4.75 million. A combined Sky Europe would serve around 23.5 million customers, but such a deal would almost certainly spark the interest of European regulators.
The three European Sky companies already share a common technology platform, but a combination would create a very big player on the content rights market for sports, movies and TV series.
(The picture shows the signage of a Sky Italia building by Oasis Graphic)
