Ex-Murdoch rejects ‘nil premium’ Sky Deutschland offer
May 13, 2014
Crispin Odey, who heads up Odey Asset Management, and who used to be married to Rupert Murdoch’s eldest daughter, is saying that the suggested purchase price made by Murdoch/21st Century Fox for Sky Deutschland’s assets is simply not enough.
The current proposal, where BSkyB acquires Sky Deutschland (55 percent owned by Fox) using the VWAP formula (Volume-weighted average price) which Odey says is a “nil premium” benefit for shareholders. The VWAP price is currently €6.93.
Odey has some clout. It holds 8 per cent of Sky Deutschland via Odey Asset Management LLP, representing 70,335,122 shares (and worth at May 13th opening price of €7 some half a billion Euros) and Odey says the price currently being mentioned “significantly understates the value of the company”. Another Odey vehicle (Odey Investment Funds plc) holds another 3 per cent of Sky Deutschland.
BSkyB, in its formal statement May 12th said “At the right value, this combination would have the potential to create a world-class multinational pay-TV group.” But the company also stressed that talks were at a preliminary stage and “no agreement has been reached on terms, value or transaction structure”.
Odey’s grumbles are not foolish. Most City analysts have given values nearer €10 for Sky Deutschland, which would give Odey a benefit of some €250+ million by way of a bonus!