NEWS Corp may have to pay up to 870p a share to regain control of BSkyB, with industry sources claiming resolve at board level has toughened over the last week.
This would value Sky at a staggering £15.2bn – a full £3bn above the price News Corp bid in June. Shares in Sky jumped more than one per cent to 720p on Friday despite Vince Cable ordering a preliminary investigation into the deal.
Media analyst Claire Enders, of Enders Analysis, expects a bid far in excess of 800p a share, pending regulatory clearance. She told City A.M.: “I think a final bid will be between 820p and 870p a share. It is almost unthinkable Sky would sell for anything near 700p a share. It is quite likely the takeover would involve offering a special dividend to shareholders.”
A source close to Sky agreed it is likely the firm would cost News Corp more than the figures discussed over the summer but denied board members are discussing valuations ahead of the results of the Ofcom investigation.
He said: “Until a bid gets regulatory clearance any valuation of the firm is meaningless. Even the prices discussed over the summer were speculative. This could be a long waiting game.”
Cable has instructed media regulator Ofcom to assess whether the takeover would harm “media plurality”. Ofcom will file a report before January with its recommendations, following which Cable can order an investigation by the Competition Commission. This would run parallel to a European Commission investigation, both of which would take around four months.
News Corp is determined to buy back the 61 per cent of Sky it does not already own after floating the firm in 1994.