The sky's the limit
BSkyB is often thought of as wholly owned by Rupert Murdoch's News Corp, but the media mogul only actually owns 39 percent of it. He is, however, keen to change that and has bid for the remaining 61 percent.
His first bid was apparently last week for 675p per share, with the stock trading at around 575p. That was rejected and yesterday Murdoch came back with a ‘proposal' of 700p, prompting the independent directors of BSkyB to make a public statement on the matter.
The directors, while anticipating considerable obstacles in the way of the proposal becoming a formal offer, consider the 700p per share (£7.8 billion) offer to still be well short of the mark. But they do say that they would have accepted an offer of 800p (£8.9 billion), and seem to leave the door open for further negotiations to arrive at a figure somewhere in the middle.
Furthermore, BSkyB has agreed to co-operate with News Corp in seeking the regulatory approval and merger clearance that would be required for the deal to go through.
"The eight Independent Directors have evaluated the proposal since receiving News Corporation's approach on 10 June. Based on careful review and advice, it is the unanimous view of the Independent Directors that there is a significant gap between the proposal from News Corporation and the value of the company," said Nicholas Ferguson, BSkyB's senior independent non-executive director.
"We believe the company has a track record of very strong performance and excellent growth prospects. The management team will remain fully focused on its strategic and operational priorities, positioning the Company well to grow earnings and cash and increase returns for shareholders. The Independent Directors remain fully committed to acting in the interests of all shareholders and will continue to meet on a regular basis."
The city seems to think a deal will be struck. BSkyB shares were trading at around 600p at close of play yesterday, at time of writing they were up 19 percent at 715p.
