Rupert Murdoch’s Twenty-First Century Fox Inc (NASDAQ:FOXA) is reported to have struck a bid of $14.6 billion to acquire the European pay-TV firm Sky PLC. This is a merge between two media empires in different continents, giving them an edge over rival companies like Netflix, in getting more viewers.
Following this recent report, Fox has expressed it would pay said it would pay 10.75 pounds per share/11.7 billion pounds – for 61% of Sky plc to have major control of the business with a reported “22 million customers in Britain, Ireland, Italy, Germany and Austria.”
However, the European Union is said to debate the $14.6 billion bid, as their approval is needed before any further business transaction.
According to report “The U.K. Competition and Markets Authority is not expected to ask the European Commission to turn over the deal’s antitrust review before Friday’s deadline.”
Hence, the European Union has until the 7th of April to either approve or reject the deal, because this is a huge fence Fox has got to jump.
Major shareholders told Reuters that though they thought the bid was quite low, and despite Fox’s 39% ownership, they would still accept the offer placed by 21st Century Fox to acquire Sky plc.
Moreover, the whole deal is being prolonged as Britain’s exit from the European Union in June has caused a 15% drop for the pound against the U.S. dollar, which has led to instability of Sky’s share price.
Despite the challenges surfacing, The Murdoch family has never given up in their quest to have major control of Sky, though their attempt to do so in the past caused some damages 5 years ago- when their British newspaper business got entangled in a phone-hacking scandal.
James Murdoch, the chief executive of Fox and chairman of Sky, stated: “the British-based company had led the way in delivering premium content like English Premier League soccer and the ‘Game of Thrones’ fantasy drama across multiple platforms.”
In addition, Fox is expected to pay a ‘200-million-pound’ break fee if it does not get the deal. This means the bid has to get the support of shareholders who represent 75% of the Sky shares that are not owned by Fox.