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Fox agrees deal to buy Sky

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British broadcaster Sky has agreed an £18bn takeover by Rupert Murdoch’s US media group 21st Century Fox five years after a takeover was abandoned at the height of the phone-hacking scandal. In a stock market announcement, Sky said the independent directors of both companies had reached agreement on an offer price of £10.75 per share to buy the 61% of the company that Fox does not already own. The independent directors said they would recommend the deal to Sky shareholders, assuming agreement on the other terms is reached. Sky has formed an independent committee of the board to consider the terms of the proposal.

Sky said: “The independent directors of Sky note today’s share price increase, and announce that Sky has received an approach from 21st Century Fox, Inc. After a period of negotiation, the Independent Directors of Sky and 21st Century Fox have reached agreement on an offer price of £10.75 per share in cash, less the value of any dividends subsequently paid by Sky. “However, certain material offer terms remain under discussion and there can be no certainty that an offer will be made by 21st Century Fox, nor as to the terms of any such offer.”

The offer represents a premium of 40% to Sky’s closing price on 6 December, the last business day before the initial proposal had been received from the US company, and a premium of 36% to the closing price on 8 December. Shares in Sky jumped nearly 30% to £10.26 on the news. Sky shareholders revolt against James Murdoch’s appointment as chairman. Rupert Murdoch founded Sky in 1989 but the company was merged with rival satellite broadcaster BSB a year later and since then the media mogul has never controlled a majority of its shares.

The owner of the country’s largest newspaper group tried to buy BSkyB in 2010, provoking political and media complaints that it would bring together the largest broadcaster by turnover with the publisher of the Sun and the Times. But Murdoch looked like he would prevail with modest conditions attached to the editorial governance of Sky News until the phone-hacking scandal, where public revulsion at the revelations of illegal intrusion forced the media mogul to withdraw his bid the year after. 21st Century Fox, Murdoch’s bid vehicle, owns the Fox television and film studios. But it does not own Murdoch’s newspapers which were separated out into a different company, News Corp, following the hacking scandal.

– The Guardian

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