BSkyB spurns News Corp's $11.5-bn offer

LONDON: British Sky Broadcasting Group ( BSkyB) today rejected media conglomerate News Corp's 7.8 billion pounds ($11.5 billion) offer to pick up nearly 61 per cent stake in the British firm.

The Rupert Murdoch-led News Corp already owns 39.1 per cent in BSkyB.

In a statement here today, News Corp said it, "proposes to the independent directors of BSkyB an offer of 700 pence in cash per share for the shares in BSkyB that it does not already own."

While, BSkyB's independent director said the News Corp's informal offfer is very low and said these shares will deliver value over 800 pence a piece.

"The proposal values the fully diluted share capital of BSkyB, excluding the shares already owned by News Corp, at approximately 7.8 billion pounds," News Corp, which owns The Times, The Sun and Dow Jones & Co said.

The two companies have been "unable to reach a mutually agreeable price at the current time. However, both parties have agreed to work together to proceed with the regulatory process in order to facilitate a proposed transaction."

The News Corp 700 pence offer follows an initial 675 pence a proposal it made on June 10. The 700 pence a share offer represents a 22 per cent premium to the closing share price of 574 pence on June 9.

"We believe that this is the right time for BSkyB to become a wholly-owned part of News Corp with its greater scale and broader geographic reach," News Corp deputy chairman, president and chief operating officer Chase Carey said.

News Corp plans to finance its proposed offer by using a significant portion of the available cash on its balance sheet plus borrowed funds.

BSkyB's said, "the proposal, which is not a formal offer, is subject to regulatory and financing pre-conditions, which add considerable uncertainty to when and whether any formal offer could be made."

Deutsche Bank and JP Morgan Cazenove are the financial advisers to News Corp, while BSkyB is being advised by Morgan Stanley and UBS Investment Bank.

BSkyB was created by the merger of News Corp's Sky Television and the government-owned British Satellite Broadcasting.