British Sky Broadcasting Group made a statement today, confirming the start of preliminary negotiations over an eventual purchase of 21st Century Fox Inc.s pay-TV assets in Germany and Italy. Mr. Rupert Murdoch has a 39% stake in the UK company, which he plans to transform into a satellite-TV giant based in Europe, while allowing his US company, 21st Century Fox Inc. will shift focus to entertainment programming.
BSkyB Group, which is currently the largest pay-TV provider in the U.K., is 39% owned by Mr. Murdochs 21st Century Fox, which until June last year, was also part of the same company.
As reported by the Wall Street Journal, the company said in its statement: “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.” Part of British Sky Broadcasting Groups announcement was also cited by Bloomberg: “This combination would have the potential to create a world-class multinational pay-TV group.”
According to people familiar with the process, the deal is estimated to about 10 billion euros (14 billion dollars). The negotiations between the two companies concern the acquisition of the Foxs 57% stake of Sky Deutschland and its 100% stake of Sky Italia. If the purchase is completed, it would help the magnate Rupert Murdoch consolidate his companys European pay-TV assets.
The negotiations are still at a preliminary stage, but 21st Century Fox also confirmed the rumours of the talks in a separate statement, which was cited by Bloomberg: “Over the years we’ve had numerous internal discussions regarding the organizational and ownership structure of the European Sky-branded satellite platforms. From time to time these conversations have included BSkyB, however no agreement between the parties has ever been reached.”
According to some people with knowledge of the process, who asked not to be named because the talks are still not public, the deal that is expected to form a European Sky conglomerate, could be officially announced this summer.
British Sky Broadcasting Group Plc was losing 2.37% to trade at 868.89 pence per share by 9:17 GMT, marking a one year change of +7.74%. The 23 analysts offering 12 month price targets for British Sky Broadcasting Group Plc have a median target of 935.00, with a high estimate of 1,110 and a low estimate of 600.00. The median estimate represents a 5.06% increase from the last price of 890.00.
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