Exclusive: Fox nears firm bid for Sky via scheme of arrangement - sources
By Sophie Sassard and Kate Holton
LONDON (Reuters) - Rupert Murdoch's Twenty-First Century Fox FOXA.O aims to table a firm cash bid valuing British broadcaster Sky (SKYB.L: Quote) at 10.75 pounds per share as early as Wednesday for the 61 percent of the company it does not already own, four people familiar with the matter said.
The two companies have agreed to press ahead with a scheme of arrangement, two of the sources said on Monday. That is a court-approved agreement typically used in friendly takeovers in the UK which requires 75 percent approval from shareholders, against 90 percent through a straight takeover under UK rules.
Were Fox to get the deal approved by 75 percent of Sky's independent shareholders, the scheme structure would make it easier to get full approval and delist the company.
Several small shareholders including Standard Life, Jupiter Asset Management and Royal London have already sought a higher price and questioned the initial green light given by Sky's Independent Committee, and the sources said Sky could push for a sweetened bid once a firm offer is tabled.
But they said Fox did not plan to increase its bid for the time being as it had already significantly improved a previous offer which was not made public. Murdoch is also expected to keep Sky's chief executive Jeremy Darroch to run the business as he wants continuity for the company, two of the sources said.
Murdoch's Fox said on Friday it had struck a preliminary deal with Sky's independent directors to buy the firm, five years after a phone hacking scandal at one of Murdoch's British newspapers derailed a previous attempt.
Matt Hancock, a junior minister in the department of media, said the government would follow the correct procedure after opposition politicians told parliament on Monday that the events of 2011 showed that any new deal had to be closely scrutinized.
"If a bid at this level is forthcoming, shareholders themselves will have the opportunity to accept a price which reflects a 40 percent premium or they can chose to continue to hold their stock," said a Sky spokesperson reacting to Reuters' report. Fox declined to comment. Continued...