Shareholders in Sky PLC (LON:SKY) hoping for any more cash from Rupert Murdoch's 21st Century Fox (NASDAQ:FOXA) were disappointed today as the formal bid landed at the same price as indicated last Friday.
Late on Friday, Fox tabled a 1,075p a share cash bid for Sky, backed by the FTSE 100-listed firm’s independent directors, in its second attempt to buy the 61% of the group that it does not currently own.
The stock soared 40% higher on the back of the move, but at the weekend shareholders had expressed disappointment that the firm had not pushed for a better offer.
READ: Shareholders more sanguine ...
Alastair Gunn, a fund manager at Jupiter Asset Management, was quoted by the Sunday Telegraph newspaper as saying the move "ought to be the start of the process, not the conclusion."
And analysts at Citigroup characterised the offer for the European pay-TV firm as a "low-ball bid" in a note to clients, citing a fair value assessment of £13.50 a share.
However, Fox today stuck to the terms of its earlier offer, despite the complaints from some investors, with the 1,075p cash offer implying a value for the outstanding shares of around £11.7bn.
Shareholders will also be entitled to any dividends paid by Sky up to the end of June 2018, as well as a special dividend of 10p a share.
Following confirmation of the recommended bid today, Sky shares slipped 4.5p lower to 979.0p in afternoon trading.
Fox confirmed it would need the backing of 75% of Sky's independent shareholders to secure the takeover.
Strategic rationale ...
Commenting on the acquisition, the US group said: “The strategic rationale for this combination is clear. It creates a global leader in content creation and distribution, enhances our sports and entertainment scale, and gives us unique and leading direct-to-consumer capabilities and technologies.
“It adds the strength of the Sky brand to our portfolio, including the Fox, National Geographic and Star brands.”
Fox said it expected the acquisition to complete before the end of 2017.
In 2011, Murdoch’s News Corporation - which afterwards split into 21st Century Fox and News Corp - withdrew a previous bid for the shares in Sky it did not own at the height of the furore over the phone hacking scandal at its UK newspapers.
However, analysts do not think there would be any such political or regulatory issues now given that Fox no longer has any UK newspaper assets since the split, while the phone hacking scandal has died down.