BSkyB share price: Broadcaster confirms talks over pay-TV assets in Germany, Italy

on May 12, 2014
Updated: Apr 9, 2020
Listen, Monday, May 12: BSkyB share price – Broadcaster contemplates move for Sky Deutschland, Sky Italia: Bloomberg).

Meanwhile, The Telegraph reported that a potential deal between BSkyB and Rupert Murdoch’s Fox might face strong opposition from the UK’s communication watchdog, Ofcom, if it would allow Murdoch to take overall control of the British Broadcaster. Fox currently owns a 39-percent stake in BSkyB.
In today’s trading, BSkyB shares fell 2.5 percent to 868.00p as of 12:24 BST. The decline trimmed the company’s year-to-date share price gain to 3.3 percent.

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**Preliminary discussions**
BSkyB revealed today that it had initiated preliminary discussions with 21st Century Fox to “evaluate the potential acquisition of its pay-TV assets in Germany and Italy”. The broadcaster believes that “at the right value, this combination would have the potential to create a world-class multinational pay TV group”.

BSkyB said in the statement that the talks hadn’t advanced beyond the preliminary stage and no agreement had been reached on terms, value or transaction structure. It noted that there was no certainty that a transaction would occur.
“Any potential agreement would be subject to external factors including the Sky Deutschland share price continuing to trade on an undisturbed basis,” the company’s statement continued.

BSkyB would have to acquire Fox’s controlling stake in Sky Deutschland, which is 57 percent on a fully diluted basis. Then, under German laws, it would be required to make a takeover offer for the minority shares.
Another barrier to a potential deal could be the fact that Sky Italia is yet to renew Serie A football rights in Italy. Serie A broadcasting is a key part of Sky Italia’s TV offering.

The potential combination would add some 8.5 million subscribers in Germany and Italy to BSkyB’s current subscriber base of 15 million. It would also give the broadcaster greater negotiating power over broadcasting rights, potentially helping it to fend off increasing competition from big technology companies such as Google Inc (NASDAQ:GOOGL) , Netflix Inc (NASDAQ:NFLX) and Apple Inc (NASDAQ:AAPL).
Fox issued its own statement today, commenting that: “Over the years we’ve had numerous internal discussions regarding the organisational and ownership structure of the European Sky-branded satellite platforms. From time to time these conversations have included BSkyB, however no agreement between the parties has ever been reached.”
**Ofcom opposition**
The biggest obstacle to the potential combination could come from the UK’s Office of Communications. The proposed deal could see Murdoch taking full control of the combined company, a development that would be likely to prompt opposition from the regulator, based on media plurality concerns, The Telegraph reported citing unnamed sources.
Murdoch abandoned his last attempt to take control of BSkyB in 2011, after Ofcom effectively recommended the Government to block it.
**As of 13:36 BST buy BSkyB shares at 868.50 pence**
**As of 13:36 BST sell BSkyB shares at 868.00 pence**


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