NEW YORK (The Deal) -- Germany's Sky Deutschland Holding on Wednesday recommended minority shareholders reject a €2.5 billion ($3.2 billion) offer from British Sky Broadcasting Group plc, which agreed to buy the 57.4% held by its own largest shareholder, Twenty-First Century Fox (FOX) , in July as part of a wider $9 billion-plus plan to consolidate Fox's European pay-TV interests.
The Unterfoehring, Germany-based group's recommendation was based solely on price, with the company saying both its management and supervisory board largely "share the assessment by the bidder that BSkyB and Sky Deutschland ideally complement each other in the best interests of the company and its dedicated employees, and the remaining Sky Deutschland shareholders, as well as its other stakeholders."
But they said the €6.75-per-share offer "does not reflect the full potential and thus intrinsic value of Sky Deutschland's business." It cited analysts' valuations, including a JPMorgan Chase (JPM) target price of €10.00.
It said board members holding Sky Deutschland shares, including management board member and group CEO Brian Sullivan, and the supervisory board's Stefan Jentzsch and Harald Rosch, don't plan to accept the offer. The group's directors recommended other shareholders do the same, though said they "acknowledge that investors interested in realizing their investment in the short term or with reduced risk appetite may consider the offer price as adequate."