Sky directors urged to seek better bid from Ruper Murdoch's Fox
SKY’S independent directors are facing pressure from shareholders to push for a higher price from Rupert Murdoch and not sell the broadcaster on the cheap.
Rupert Murdoch's Fox has bid for Sky
Owned by the media mogul, 21st Century Fox tabled a proposed cash offer of £10.75 per share on Friday, valuing Sky at £18.5billion.
However, investors have questioned the value of the deal and raised concerns about the involvement of Mr Murdoch’s son, James, Sky’s chairman and Fox’s chief executive.
Thomas Moore, investment director at Standard Life Investments, said the role of James Murdoch in the two 1companies meant “this can’t be an arms-length deal”.
We would hope this is a starting bid
He added: “Shareholders – our clients ultimately – are reliant on this independent board to come up with a solution which will represent proper value.
“There are concerns, given the composition of the board, that that cannot be the case. We would hope this is a starting bid and on reflection they will appreciate that a higher bid is more appropriate.”
The bid represents a 40 per cent premium on Sky’s share price on December 6. Including all debt, the proposed deal values Sky at £25.3billion.
21st Century Fox tabled a proposed cash offer of £10.75 per share
Alastair Gunn, a fund manager at Jupiter Asset Management, told reporters that Fox’s approach “ought to be the start of the process, not the conclusion”.
Fox, which already owns 39 per cent of Sky, has until January 6 to announce a firm intention to make an offer, after which the Government has 10 days to refer the deal to Ofcom.
The decision on whether to ask Ofcom to investigate will fall to Culture Secretary Karen Bradley and will come five years after Mr Murdoch last took a tilt at Sky through News Corporation.
Fox already owns 39 per cent of Sky
The company was forced to abandon its plans after becoming embroiled in the News International phone-hacking scandal.
Jerry Dellis, equity analyst at Jefferies, said: “Ofcom’s historic reservations about media plurality seem less credible now with more fragmented landscapes of news distribution and TV, also the split of legacy News Corp TV and press interests. Fox’s promise that a merger would secure the UK’s position as a major hub for content generation and technological innovation may please Ofcom.”