This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Time Warner Sale Inches Closer as Murdoch's Fox Strikes Deal with BSkyB

Stocks in this article: FOX TWX TROW NWSA B

LONDON (The Deal) -- The U.K.'s British Sky Broadcasting Group has sealed a deal to buy leading shareholder 21st Century Fox (FOX - Get Report) Italian and German pay-TV interests, creating a company with 20 million subscribers and handing £5.28 billion ($9 billion) in cash and assets to Rupert Murdoch's film and TV powerhouse as it weighs increasing its unsolicited $80 billion bid for Time Warner  (TWX - Get Report).

After more than two months of discussions, BSkyB agreed to pay £2.07 billion plus a 21% stake in National Geographic Channel International valued at £382 million for 21st Century Fox's wholly owned Sky Italia. It will pay 21st Century Fox £2.9 billion for a 57.4% stake in separately listed Sky Deutschland and make a €6.75-per-share ($9.08) offer for the outstanding shares.

The transactions would lift BSkyB's revenue from £7.6 billion to £11.2 billion, increase its purchasing power for programming like Germany's Bundesliga soccer matches, and allow it eventually to bring quad-play services to a pan-European audience. BSkyB shareholders, accustomed to regular share buybacks, had earlier express skepticism about the plans and worries that the U.K. group would end up paying too much for Sky Italia.

The Isleworth, England buyer on Friday surprised investors by announcing a share placement equivalent to 9.99% of its pre-issue capital. It said on Friday afternoon it raised £1.36 billion before expenses and sold the shares at 870 pence. BSkyB shares were down 5.4%, at 875 pence.

The potential to expand in Germany is a "huge market opportunity," said Peel Hunt's Alex DeGroote, noting that Sky Deutschland is only one-sixth of the size of BSkyB and that pay-TV penetration in Germany remains low. But, he added: "Make no mistake, this is a very long-term bet and I wouldn't underestimate the complexity of putting these businesses together."

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,191.37 -195.84 -1.13%
S&P 500 2,002.16 -27.39 -1.35%
NASDAQ 4,637.9940 -43.5030 -0.93%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs