‘Transformation’ Day for BSkyB

BSkyB’s shareholders will formally decide today whether to go ahead with the broadcaster’s £5.4 billion (€6.88bn) acquisition of Sky Italia and Sky Deutschland.

There are not likely to be many objectors given that the acquisitions will transform BSkyB into a Europe-wide £22 billion business, and with immense prospects.

At the end of the process, BSkyB will control some 20 million subscribers with an expansion target of a huge 97 million new households.

However, as yet unresolved are the responses of the minority shareholders in Sky Germany. While a shareholding of 57.4 per cent, previously in the hands of 21st Century Fox, would flow into the new deal, there are some minority shareholders who have resisted the deal and who are seeking more than the €6.75 per share on offer.

While the formal vote takes place today, the deal is not expected to close until November.

But BSkyB is not having everything its own way. October 3 saw a negative note emerge from investment banker Credit Suisse, which has retained a negative outlook on the company’s share price, and which it cites as anxieties over the upcoming Premier League auction over TV rights. Credit Suisse says it sees “few good outcomes” for Sky. “We think the only bullish outcomes for Sky would be: Sky and BT both decide against bidding aggressively; or Sky lodges a ‘blockbuster’ bid to buy six out of seven packs, in an effort to force BT out of the wholesale content market,” wrote analyst Omar Sheikh.

He goes on to say that neither view is likely, and instead anticipates a 60 per cent increase in the cost to BSkyB of its football costs.

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