Murdoch's Twenty-First Century Fox bids $14 billion for UK's Sky
By Jessica Toonkel, Kate Holton and Pamela Barbaglia
NEW YORK/LONDON (Reuters) - Rupert Murdoch's Twenty-First Century Fox Inc (FOXA.O: Quote) has struck a preliminary deal to buy the 61 percent of British pay-TV firm Sky Plc SKY.L it does not already own for around $14 billion, five years after a political scandal wrecked a previous bid.
The proposed offer of 10.75 pounds a share in cash, which is backed by Sky's independent directors, would strengthen the position of James Murdoch - who is both chief executive of Fox and chairman of Sky - in his 85-year-old father's media empire.
People familiar with the matter said Fox had pounced after Britain's vote to leave the European Union in June sent the pound down about 14 percent against the U.S. dollar and Sky's share price tumbling.
Owning Sky would give Fox, whose cable networks include Fox News and FX, control of a pay-TV network spanning 22 million households in Britain, Ireland, Austria, Germany and Italy.
It would also be the latest deal to marry distribution with content after AT&T Inc (T.N: Quote) announced an $85 billion bid to buy Time Warner Inc (TWX.N: Quote) earlier this year. While Sky does produce some of its own content, including in news and sport, the deal would give Fox full ownership of a wider distribution platform in Europe.
"Fox has always seen its 39 percent stake in Sky as an unnatural state of being and has long been trying to buy full control," a person familiar with the deal said.
"Now it was the perfect moment. With the weak pound (and lower stock price), Sky has become 40 percent cheaper and the government is supportive of almost any investment in Britain."
Rupert Murdoch's previous attempt to buy Sky through his News Corp (NWSA.O: Quote) business provoked uproar among some UK politicians, who said it would give the billionaire owner of The Sun and The Times newspapers too much control over the country's media. Continued...