€6.3bn Sky Europe offer
July 25, 2014
By Chris Forrester
It has probably been the worst-kept stock exchange secret for some time, but the long-awaited formal news of BSkyB’s planned acquisition of Sky Deutschland and Sky Italia broke at 7am London time on July 25, and the details are now clear.
The headlines are that the end results will create a 20 million subs pay-TV outfit.
“The total consideration for the acquisition of Sky Italia is £2.45 billion with approximately £2.07 billion to be paid in cash and the balance to be satisfied through the transfer of BSkyB’s 21 per cent stake in National Geographic Channel International to 21st Century Fox at a value of £382 million. The acquisition of 21st Century Fox’s shareholding in Sky Deutschland is for a consideration of £2.9 billion in cash, valuing Sky Deutschland at €6.75 per share. The transactions are subject to regulatory and independent shareholder approval,” says BSkyB.
But that amount of €6.75 per share is key to the transaction, and Sky Deutschland’s minority shareholders, representing 42.6 per cent of the issued share capital, are looking for more. In other words the above quoted costs could rise.
“The acquisitions will also bring benefits of scale, taking BSkyB from 11.5 million customers to 20 million. On an aggregated basis group revenues will increase from £7.6 billion for the standalone BSkyB to £11.2 billion,” said the Sky statement.
“The enlarged group will be better positioned to take advantage of the enhanced growth opportunityas result of the ability to share expertise across the wider business. BSkyB, Sky Italia and Sky Deutschland are complementary businesses with a common brand, operating similar business models and offering similar products to customers. Bringing them together will enable the application of best-in-class capabilities in areas such as content, innovation and service delivery, to the benefit all of three businesses and their customers.”
BSkyB is placing 156.1 million new ordinary shares to fund its planned acquisition of Sky Deutschland and Sky Italia, announced at the same time.
21st Century Fox will take 61.1 million shares from the new issue in order to maintain its 39.14 per cent stake in the new operation, and Fox says it will not exceed 37.19 percent of the voting rights on the new operation.
The placing means that BSkyB’s issued shares will grow by 9.99 per cent.
The stock issue has been fully underwritten by Barclays Bank and Morgan Stanley.