Sky, 21st Century Fox agree for takeover deal

Twenty-First Century Fox has formally reached an agreement with Sky for a total takeover to the tune of $14.8 billion. 

Under the terms of the acquisition, Sky shareholders will be entitled to receive £10.75 in cash per share, which represents a pretty healthy premium of 40 percent above December 6, 2016’s closing price.  Twenty-First Century Fox already owns just over 39% of Sky.

The price reflects a valuation of £10.75 per share, according to Reuters, who, along with the BBC, claimed that some investors were unhappy with the valuation but did not go into specifics.
Reuters reported that the offer represented a 40% premium on the share price from the day before Fox’s initial proposal was received.

Fox currently anticipates that the acquisition will complete before the end of 2017. If not, Sky shareholders will get a special dividend in 2018. The U.K. company will not pay any dividends in 2017.

Taking control of Sky will give Twenty-First Century Fox, which owns cable networks Fox News, FX and the Fox broadcast channel and a major Hollywood film studio, a distributor in Europe. Sky has 22 million customers in the U.K., Ireland, Germany, Austria and Italy.

"The enhanced capabilities of the combined company will be underpinned by a more geographically diverse and stable revenue base. This combination creates an agile organization that is equipped to better succeed in a global market," 21st Century Fox said in a statement.

However, James Murdoch said he expected the deal to be approved by the regulator. "There are various bits and pieces to the European [regulatory] timeline and if necessary the UK timeline with the department of culture, media and sport and Ofcom having to make a number of decisions in the next little while," he added.