Ex-Murdoch rejects ‘nil premium’ Sky Deutschland offer

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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!


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