US media company 21st Century Fox and Sky have today (Thursday) confirmed they have reached agreement on the terms of a recommended pre-conditional cash offer by the former for the fully diluted share capital of the pan-European pay-television broadcaster, which Fox and its affiliates do not already own.
Today’s announcement to the stock exchange comes after Sky, a major broadcaster of sports coverage, confirmed on Friday a takeover approach for the 61 per cent of the company that is currently not controlled by Rupert Murdoch’s Fox.
The agreement sticks to the original offer of £10.75 (€13/$14) per share. Fox said it will pursue a Scheme of Arrangement, therefore requiring the support of 75 per cent of Sky's independent shareholders who vote to secure a deal that values Sky at £18.5bn in total.
The price of £10.75 per Sky share represents a premium of approximately 40 per cent to the closing price of £7.69 share on December 6, the last business day before the date on which the initial proposal was received from 21st Century Fox by Sky.
Commenting on the deal, 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. It adds the strength of the Sky brand to our portfolio, including the Fox, National Geographic and Star brands. This combination creates an agile organisation that is equipped to better succeed in a global market.”
Martin Gilbert, deputy chairman of Sky, added: “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… we, supported by our advisers, believe 21st Century Fox's offer at a 40 per cent 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.”
Fox currently has a 39-per-cent stake in Sky, which in 2014 completed acquisitions of sister operators Sky Deutschland in Germany and Sky Italia in Italy. Fox said the deal, which will require thorough scrutiny by regulators, is expected to close before the end of 2017.