Fox agrees price for Sky

21st Century Fox has returned with another bid for European satcaster Sky and has agreed a price per share with the company’s directors.

James Murdoch

In a statement this afternoon Sky noted an increase in its share price and said its independent directors and 21st Century Fox had reached an agreement at £10.75 (US$13.51) per share, a total of £11bn, for the 61% of the company it doesn’t already own.

However, the companies were at pains to say that material terms of the deal remain under discussion and “there can be no certainty that an offer will be made by 21st Century Fox.”

The Sky directors have indicated to Fox that they are willing to recommend the proposal to Sky shareholders pending agreement on the other terms.

Sky’s shares were up more than 30% today, with the deal representing a premium of 40% on the closing price on December 6, the day before the initial proposal was received.

This latest development comes just over a year after it was reported that 21st Century Fox was eyeing another bid for the European pay TV giant, following comments from 21st Century Fox CEO James Murdoch.

Rupert Murdoch

Fox already owns 39% of Sky, but following the takeover by the UK division of its sibling operations in Germany and Italy, it now wants to take a majority share.

Murdoch, who took control as Fox CEO in 2015, said in October last year that the enlarged Sky was working well but admitted that “having 40% of an unconsolidated asset is not an end state that is natural for us.”

Murdoch returned to Sky as chairman in January, fuelling the rumours further.

His father, media mogul Rupert Murdoch, had previously attempted to grapple full control of Sky in the UK back in 2011 but was forced to end the chase after allegations of phone hacking hit newspapers within News Corp.

A statement from 21st Century Fox this evening said: “In the past several years, 21st Century Fox has consistently stated that its existing 39.1% stake in Sky is not a natural end position.

“A proposed transaction between 21st Century Fox and Sky would bring together 21st Century Fox’s global content business with Sky’s world-class direct-to-consumer capabilities, which have made it the number one premium pay TV provider in all its markets.  It would also enhance Sky’s leading position in entertainment and sport, and reinforce the UK’s standing as a top global hub for content generation and technological innovation.”

Stock market rules give Fox until 17.00 on January 6 to announce its intention to make a firm offer.

Fox has previously made a move to buy Time Warner but bailed out after its US$80bn offer was rejected. Earlier this year, French media group and Canal+ owner Vivendi was reported to be eyeing up Sky – claims dismissed by its owners.

Sky added that discussions over the latest deal are continuing and a further announcement will be made as appropriate. The satcaster added that its statement today had not been made with the consent of 21st Century Fox.