21st Century Fox, BSkyB Discuss European TV Deal

LONDON (The Deal) -- After a humiliating defeat in 2011 which precipitated a restructuring at News Corp. (NWSA) Rupert Murdoch is once again attempting to consolidate his European pay-TV operations.

21st Century Fox's 39%-owned British Sky Broadcasting Group plc has entered talks with its largest shareholder about buying the New York TV and film group's wholly owned Sky Italia unit and its separately listed Sky Deutschland, in which 21st Century Fox owns a 57% stake.

Both BSkyB and 21st Century Fox confirmed the talks on Monday, May 12, with BSkyB noting that it doesn't envisage offering a premium to minority owners of Sky Deutschland if it ends up striking a deal with the German company's controlling shareholder. It said an agreement would be subject to " the Sky Deutschland share price continuing to trade on an undisturbed basis."

Sky Deutschland shares had shot up 6.6% to 6.74 euros by early afternoon in Frankfurt, valuing the entire equity at 5.92 billion euros ($8.15 billion).

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"BSkyB believes at the right value, this combination would have the potential to create a world-class multinational pay TV group," the Isleworth, England company said. "These discussions have not progressed beyond a preliminary stage, no agreement has been reached on terms, value or transaction structure and there is no certainty that a transaction will occur. "

The talks come almost three years after News Corp. abandoned a controversial 7.8 billion pound ($13.2 billion) offer for the remaining BSkyB shares amid outrage about a phone hacking scandal centered on News Corp.'s U.K. print operations and the now-defunct tabloid News of the World.

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