News Corp ups offer for BSkyB

Conglomerate looks to build on its controlling stake with buyout.
Rupert Murdoch, CEO and president, News Corp.
Rupert Murdoch, CEO and president, News Corp.

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News Corp has made an improved offer of 700 pence per share for UK pay TV operator BSkyB after having an approach of 675 pence per share rebuffed last week.

News Corp has a controlling stake in the broadcaster of 39.1 percent but is now looking to purchase all remaining shares.

Despite the initial rejection, a statement from BSkyB said that it would consider a proposal in excess of 800 pence per share.

The moves goes against News Corp’s investment strategy whereby it rarely takes full control of its interests.

BSkyB has been a major success story in recent years. It has continued to add subscribers during the downturn and has increased its average revenue per user in recent years by offering broadband and telephone services to its subscribers.

The company more than tripled its contribution to News Corp profits compared to the previous financial year.

The weak British pound lowers the cost of acquisition for News Corp significantly. This also reduces the value of the company’s revenue, however, any future recovery by the pound would negate this and make the deal look like good value in hindsight.

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