Sky tells News Corp to raise its £12bn bid

BSKYB yesterday told Rupert Mur­doch’s News Corporation it has to stump up at least £1bn more if it wants to buy the Pay-TV broadcaster.

News Corp tabled a 700p a share, which values Sky at around £12.25bn, to buy the 60.9 per cent of Sky it does not already own.

But yesterday Sky’s independent directors, led by SVG chairman Nicholas Ferguson, rejected that bid saying they would only be willing to recommend an offer “in excess of 800p” to investors.

However, Sky said it would co-operate with News Corp as it sought EU regulatory approval for the deal because a higher offer from its largest shareholder “could be in the interests of BSkyB in the future”.

News Corp’s current offer means it will have to pay around £7bn in cash to buy Sky. Yesterday News Corp deputy chairman Chase Carey, who is leading the bid, said it plans to borrow $4bn (£2.7bn) to fund the deal. News Corp, which owns the Sun and The Times and helped set up Sky more than 20 years ago, said Sky was a business it knew well and its subscription model would make the enlarged business less reliant on advertising revenues. Sky is the largest digital pay-TV platform in Britain reaching a third of all homes with 9.8m subscribers in April.

Sky chairman James Murdoch said that he would not get involved in this deal as he is also a News Corp board director.