August 19, 2022

DealBook: Path Cleared for News Corp.’s BSkyB Bid

Rupert Murdoch on June 21 at The Times C.E.O. summit in London.Pool photo by Ben GurrRupert Murdoch on June 21 at The Times C.E.O. summit in London.

British regulators confirmed on Thursday that they were ready to pave the way for News Corporation’s takeover of the pay television company BSkyB.

The government said that a long review of the deal, which the News Corporation offered to adjust in order to satisfy regulatory concerns, had “produced no new information” to change the official stance to allow the acquisition.

With that, the News Corporation is one step closer to buying the 60.9 percent of BSkyB that it does not already own, leaving the price of the takeover as the chief remaining uncertainty.

Concessions made by Rupert Murdoch’s media empire to spin off Sky News, BSkyB’s popular news channel, were enough to appease the concerns of Culture Minister Jeremy Hunt, who said in March that he was “minded to accept” the proposal.

Mr. Hunt, however, has submitted a few more conditions to closing the deal. These include appointing an independent director with experience in journalism to the Sky News editorial board, ensuring that BSkyB continues to cross-promote Sky News after the spin-off and appointing a trustee to monitor the News Corporation’s compliance with the rules in the transition period.

“The regulators have confirmed that the proposed undertakings are still sufficient to ensure media plurality,” Mr. Hunt said on Thursday in a statement. “I could have decided to accept the original undertakings, but a number of suggestions were made in response to the consultation.”

Given the proposed changes, Mr. Hunt extended the review period until July 8, but government backing is all but assured. Issues of media plurality have delayed the acquisition, given that the News Corporation owns the British newspapers The Times, The Sun and News of the World.

Now, Mr. Murdoch is left to haggle with BSkyB shareholders, many of whom expect a higher offer than the 700 pence a share he bid last summer, which values the 60.9 percent stake at £7.8 billion.

BSkyB responded at the time that its management would support an offer worth more than 800 pence, and some analysts think the final proposal could be well in excess of that.

Nick Bell, an analyst with Jefferies, said he thought a bid of 850 pence a share was likely, but that expectations of anything above 900 pence were unrealistic.

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