Sky and 21st Century Fox agree takeover terms

Sky and 21st Century Fox have agreed terms of a takeover a deal that will value the pay TV operator at £18.5 billion (€22 billion).

21st Century Fox has agreed to pay £11.7 billion for the 61% it does not already own of Sky.

The price of £10.75 per-share marks a premium of approximately 40% on the closing price of £7.69 per Sky share on December 6, 2016 – the last business day before Sky received an initial proposal from 21st Century Fox.

21st Century Fox said that it now expects the deal to close before the end of 2017 and, as reported by Sky News, the ‘scheme of arrangement’ takeover means that only 75% of Sky’s independent shareholders need to approve the deal before minority stakehoders opposed to the offer are compelled to accept it.

Karen Bradley, the UK’s secretary of state for culture, media and sport, has 10 days to refer the bid to media regulator Ofcom to see if it complies with UK media plurality. Ofcom would then have 40 days to investigate the deal.

In a statement issued by the company, 21st Century Fox said: “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.”

As at 30 June 2016, Sky served approximately 22 million customers across five countries: Italy, Germany, Austria, the UK and Ireland. The company has annual revenues of approximately £12 billion.

Sky first confirmed that 21stCentury Fox has tabled a possible £10.75 (€12.66) per-share offer earlier this month. However, subsequent reports indicated some unrest among shareholders, with minority investor Standard Life commenting to the BBC: “We would hope this is a starting bid and on reflection they will appreciate that a higher bid is more appropriate.”