21st Century Fox Reaches Preliminary Deal to Buy Sky
LONDON — Five years after Rupert Murdoch abandoned a $12 billion bid for complete control of the British satellite television giant Sky, his 21st Century Fox media corporation has reached a preliminary merger deal.
Sky said on Friday that 21st Century Fox had offered to pay 10.75 pounds a share in cash, less the value of any dividends subsequently paid by Sky, for the 61 percent stake in Sky that it did not already own. That offer would value Sky at about $23 billion.
The two companies are still in talks over the final terms of a deal.
The takeover approach came more than five years after 21st Century Fox’s predecessor company, News Corporation, withdrew an offer for the rest of Sky – then known as BSkyB – as a firestorm erupted over phone-hacking by the media in Britain.
In 2011, it emerged that reporters at News of the World, a Sunday tabloid newspaper then owned by a subsidiary of News Corporation, had hacked the mobile phone of a young murder victim in Britain and listened to her voice mail messages, inciting outrage in Britain. The scandal led to the newspaper being closed and soon engulfed News Corporation’s publishing business in Britain.
News Corporation later split into two companies in 2013. Its entertainment assets were housed in the newly christened 21st Century Fox, while the new News Corporation consisted of its publishing business, including The Wall Street Journal and The Times of London.
The scandal also forced James Murdoch, the son of Rupert Murdoch and chief executive of 21st Century Fox, to step down as chairman of Sky.
The younger Murdoch served as chairman of Sky from 2007 to 2012. He has remained well respected in European media circles and returned to serve as Sky’s chairman this year, raising speculation that another takeover bid by 21st Century Fox was in the works.
The new offer represents a 40 percent premium to the Sky’s closing price on Dec. 6, the last day before the initial Fox approach.
Shares of Sky closed up nearly 27 percent in trading in London on Friday after the announcement, but ended the day below the offer price. In the United States, shares of 21st Century Fox were trading down 3 percent in midday trading.
“There can be no certainty that an offer will be made by 21st Century Fox, nor as to the terms of any such offer,” Sky said in a news release.
Sky said that its independent directors had indicated to 21st Century Fox that they were willing to recommend the proposal to shareholders, subject to reaching an agreement on the other outstanding terms. The independent directors were advised by Barclays, Morgan Stanley and PJT Partners, Sky said.
The company also said that it had formed an independent committee of its directors that it considers free of any conflicts of interest to consider the terms of the Fox proposal.
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