Published: Fri, December 16, 2016
Economy | By Melissa Porter

21st Century Fox Confirms $14.6B Bid for Sky

Rupert Murdoch's Twenty-First Century Fox FOXA.O said on Thursday it had agreed to buy European pay-TV firm Sky SKYB.L for $14.6 billion, sticking to its earlier offer despite complaints from some investors.

The deal is worth £10.75 ($13.40) per Sky share, or $14.8 billion (14.2 billion euros ) in total for the cash purchase, the statement said.

In a statement 21st Century Fox, which is behind the hit shows Modern Family and The Simpsons, said: "As the founding shareholder of Sky, we are proud to have participated in its growth..."

That type of merger agreement allows an acquirer to more quickly purchase 100% of its target but could be harder to pull off because Fox's stake will be excluded from voting on the transaction. Unlike when Murdoch's News Corp bid for Sky in 2010, Fox doesn't own any United Kingdom newspapers and the rise of digital outlets may also work in the bid's favour, as people rely less on TV, radio and print publications to get their news.

It is not a done deal, and has the potential to be messy politically.

Shares in Sky were trading at 985 pence on Thursday. The company's stock soared when deal talks were first disclosed but have remained well short of the offer price.

The agreed deal come five years after Murdoch failed in a previous bid to buy Sky when a newspaper phone hacking scandal at one of his tabloids derailed a previous offer.

Rupert Murdoch owns the multinational mass media corporation, News Corporation or News Corp, Sun and the Times newspapers.

Murdoch is 21st Century Fox's executive co-chairman and former chairman and CEO.

Taking control of Sky will give Twenty-First Century Fox, which owns cable networks Fox News, FX and the Fox broadcast channel and a major Hollywood film studio, a distributor in Europe. The company pledged to keep Sky's headquarters in London and complete a £1 billion investment in the campus.

European Union regulators can also assess the deal, though they approved a similar proposal between Fox's predecessor and Sky in 2010. "It creates a global leader in vertically integrated distribution, it enhances our sports and entertainment scale, and gives us leading direct-to-consumer capabilities and technologies".

Fox is expected to make the case that since its predecessor spun off its publishing assets in 2013, Fox owns no British media assets besides its existing minority position in Sky, and thus a combination won't affect diversity in media ownership. She is been given the power to ask Ofcom, the media watchdog, to examine the deal, BBC news reported.

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