British Sky Broadcasting Group started its move to put together Sky Europe, in a deal adding firepower to 21st Century Fox’s quest of Time Warner Inc for billions of dollars.
The leading pay-TV operator in the UK market and controlled by Rupert Murdoch said on Friday it had agreed to purchase its sister businesses in Italy and Germany from 21st Century Fox for what is said to be more than $9 billion, with the majority of the deal in cash.
The acquisitions will create pan-European giant of pay-TV with close to 20 million customers spread across Austria, Germany Ireland, Italy and the UK.
For Murdoch, the deal gives him a large amount of cash while 21st Century Fox contemplates advancing its takeover bid of $80 million for Time Warner its rival media titan, which rejected the first overture by Fox.
Fox is expecting about $7.2 billion net proceeds after tax from the transactions, which industry analysts called crucial in making the math for the deal work out to acquire Time Warner.
In addition Fox moved on Friday to reassure any skittish investors that have sent shares down over 6% since last week when the first news of the offer to Time Warner broke, saying next month it would renew the buyback plan for shares.
The new authorization for a buyback will be carried out regardless of an acquisition or any investment activity by the company, said Murdoch in a statement.
BSkyB is acquiring the 100% stake of Fox in Sky Italia the Italian television company for $4.2 billion, of which a large proportion is in cash.
The company will also buy a stake of 57.4% in Sky Deutschland for $4.9 billon all in cash.
BSkyB has also offered 6.75 euros per share to the remaining minority shareholders at Sky Deutschland, but CFO Andrew Griffith at BSkyB said the business was neutral about taking out the other shareholders.
Griffin said they would not chase down the minority, as there is no desire to have 100%. The company he said was content having 57% if they do not end up with any more.
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