Sky share price rises amid speculation of possible takeover by Vivendi

Vivendi S.A. has denied speculation that it is considering a possible acquisition of Sky Plc (LON:SKY), according to Bloomberg. The news outlet said yesterday that a Vivendi representative had disputed an earlier report by Reuters claiming that the French media group was considering Sky as one of several possible options with regard to the intended expansion of its own TV business, Canal Plus.

The Reuters report cited unnamed sources, who said Vivendi had turned its attention to Sky, after reviewing smaller subscription TV companies in Turkey and Europe. The sources also claimed that the company had yet to decide whether or not to go ahead with an offer and added that the deliberations are still at an early stage.
Last year British Sky Broadcasting, the UK’s largest subscription TV provider, acquired nearly all of Sky Deutschland and all of Sky Italia to create Sky Plc, a pan-European operator, with around 20 million subscribers. The deal, which was designed to expand BSkyB’s ability to reach other European markets, realised Rupert Murdoch’s ambition of combining his European TV interests into one single corporate entity. Prior to the acquisitions, Murdoch’s 21 Century Fox owned 100 percent of Sky Italia, a majority stake in Sky Deutschland and 39 percent in BSkyB. The US media group has retained a 39-percent stake in the enlarged Sky corporation.
According to Reuters, acquiring Sky could prove costlier than the company’s market capitalisation suggests. A deal for the British firm could cost Vivendi as much as £28 billion. According to industry sources, such a price tag could prove too much of a stretch for the French group.
Meanwhile, Vivendi has officially set its sights on a much more affordable target. The company announced yesterday that it had entered exclusive talks to acquire 80-percent of Orange SA’s video-sharing service, Dailymotion, for €217 million. Dailymotion is one of the more prominent YouTube competitors, although with only 128 million unique visitors per month, it is still much smaller than Google’s hugely-popular video portal.
In today’s trading, Sky shares were up 1.9 percent at 1,042.00p as of 09:46 BST, having risen as much as four percent earlier in the session. The stock has gained 15.9 percent since the start of the year. The company’s share price currently stands at £17.5 billion.
As of 11:09 BST, Wednesday, 08 April, Sky Plc share price is 1,038.50p.