Sky share price jumps after reports of rebuffed bids for Murdoch stake
Shares of Sky Plc (LON:SKY) jumped as much as five percent this morning after a report emerged of rebuffed bids for Rupert Murdoch’s stake in the pan-European pay-TV broadcaster. Citing unnamed financial industry sources, The Sunday Telegraph reported that the Murdoch family had rebuffed two offers for their 39-percent stake in Sky from French conglomerate Vivendi and British mobile phone giant Vodafone Group Plc (LON:VOD).
According to the newspaper, Vivendi’s biggest shareholder, Vincent Bollore, held informal discussions on the possibility of acquiring the stake in the spring. However it is reported that the Murdochs wanted £18 pounds a share, which represents a more than 70 percent premium on Sky’s current share price.
The Sunday Telegraph also said that Vodafone had made an approach for the stake last year, but the mobile group did not pursue the talks after the Murdochs demanded a similar premium.
Analysts at Liberum said a deal with Vivendi might still happen given the main issue seemed to centre on price alone. They also said that despite reports suggesting that Murdoch’s 21st Century Fox is considering buying the rest of Sky, a Fox bid was now less likely because “it would be hard for Fox to argue that Vivendi should pay £18 a share for Sky without offering a similar amount to other shareholders, and we do not see Fox doing this”.
In today’s trading, Sky shares were up 3.9 percent at 1,078.00p, as of 11:02 BST. The stock has risen nearly 20 percent since the start of the year and the company’s current market valuation stands at£18.5 billion.
The 26 analysts offering 12 month price targets for Sky have a median target of 992.50p, with a high estimate of 1,300p and a low estimate of 530.00p.As of June 19, 2015, the consensus forecast amongst 28 polled investment analysts covering Sky had it investors to hold their position in the company. This consensus estimate has been maintained since the sentiment of investment analysts deteriorated on January 12, 2012.
As of 14:29 BST, Monday, 22 June, Sky Plc share price is 1,067.50p.