Advanced Television

BSkyB ‘must pay more’ for Sky Deutschland

July 24, 2014

By Chris Forrester

The minority shareholders in Sky Deutschland are looking for a significant premium for their stock from BSkyB. BSkyB is looking to acquire all of Sky Deutschland (as well as 100 per cent of Sky Italia) and there are numerous reports that a formal acquisition bid is only days away. Financial analysts have suggested that BSkyB’s final bill for the German and Italian pay-TV assets could easily top £20 billion – and it could be much more.

BSkyB will unveil its latest results on Friday (July 25) and the market is anticipating a formal announcement from Sky regarding its German and Italian plans. Analysts have suggested potential synergy savings of some £100 million a year could be achieved by 2017 with the enlarged ‘Sky Europe’ in place.

However, from a ‘high’ point last year (in December, at €8.13) the price of Sky Deutschland’s shares has tumbled some 17 per cent to around €6.60 on July 23, and not helped by BSkyB stating firmly on May 12 that it did not plan to pay a premium in what would be a mandatory offer for the remaining 43 per cent of Sky–D that is not held by 21st Century Fox (which owns 57 per cent).

July 23 saw Taube Hodson Stonex Partners LLP (THS), and one of Sky-D’s top five minority shareholders, tell Bloomberg that BSkyB “had to persuade us” to sell its shares. Cato Stonex, a fund manager at THS, told Bloomberg that Sky Deutschland’s current 3.7 million subscribers were likely to double over the next five-to-ten years, and could eventually reach 13 million to15 million given that Germany’s target pay-TV audience was larger than that of the UK and Italy combined.

Recent evidence in the form of other deals suggests that THS might be right in its thinking. Odey Asset Mgt, backed by Crispin Odey (who was once Rupert Murdoch’s son-in-law) has also made no secret that it would be seeking a premium for its stake in Sky-D.

On July 18, in a note to investors from Berenberg Bank, it suggested a target price of €7.60 for Sky Deutschland’s shares.


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