Rupert Murdoch owned 21st Century Fox has reached a £11.7-billion deal with Sky to take full control of the European pay-TV giant. Fox expects the deal to be concluded before the end of 2017. The transaction values the stake in Sky that Fox doesn’t already own (60.9 percent) at £10.75 per share.
“As the founding shareholder of Sky, we are proud to have participated in its growth and development,” the company said in a statement. “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, noted, “I am enormously proud that Sky is the number one premium pay-TV provider in all its markets and is recognized 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 percent 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.” added Gilbert.