21st Century Fox Agrees to Purchase Sky for $14.1 Billion

Sky provides satellite TV service to 21.8 million customers across the U.K., Ireland, Italy and Germany

Last Updated: December 9, 2016 @ 10:41 AM

Twenty-First Century Fox has reached a preliminary deal to buy European pay TV giant Sky for $14.1 billion, Sky revealed on Friday in an announcement that was later confirmed by Fox.

The Murdoch family’s Fox already holds a 39 percent stake in Sky and offered 10.75 pounds ($13.51 USD) per share to take over the rest of the company.

The preliminary deal is for 11.2 billion pounds, which is equal to $14.1 billion, according to Bloomberg. Sky provides satellite TV service to 21.8 million customers across the U.K., Ireland, Italy and Germany.

“The Independent Directors of Sky PLC note today’s share price increase, and announce that Sky has received an approach from 21st Century Fox, Inc,” Sky said in a press release. “After a period of negotiation, the Independent Directors of Sky and 21st Century Fox have reached agreement on an offer price of £10.75 per share in cash, less the value of any dividends subsequently paid by Sky. However, certain material offer terms remain under discussion and there can be no certainty that an offer will be made by 21st Century Fox, nor as to the terms of any such offer.”

The statement continues: “The Proposal represents a premium of 40 percent to the closing price on 6th December, being the last business day prior to the initial proposal being received from 21st Century Fox, and a premium of 36 percent to the closing price on 8th December, being the last business day prior to this announcement.”

Sky noted that “discussions are continuing and a further announcement will be made in due course as appropriate.” Morgan Stanley, PJT Partners and Barclays are advising the company’s board.

“Certain material offer terms remain under discussion and the Possible Offer may or may not lead to an offer being made by 21st Century Fox,” 21CF said in a statement.

21st Century Fox continued: “In the past several years, 21st Century Fox has consistently stated that its existing 39.1% stake in Sky is not a natural end position. A proposed transaction between 21st Century Fox and Sky would bring together 21st Century Fox’s global content business with Sky’s world-class direct-to-consumer capabilities, which have made it the number one premium pay-TV provider in all its markets. It would also enhance Sky’s leading position in entertainment and sport, and reinforce the U.K.’s standing as a top global hub for content generation and technological innovation.”

This isn’t the first time 21st Century Fox has attempted to own the asset outright. A 2010 attempt by Rupert Murdoch was squashed following a hacking scandal involving two of his newspapers.

Fox is required to clarify its intentions by no later than Jan. 6, 2017. The company did not immediately respond to TheWrap’s request for comment on this takeover attempt.

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