BSkyB Shares Hit 9-Year High

Rupert Murdoch may have to increase his $13 billion offer for BSkyB by more than 30% if he wants to win over shareholders.

LONDON - Rupert Murdoch may have to increase his £7.8 billion ($13 billion) offer for BSkyB by more than 30% if he wants to win over shareholders in the hugely profitable pay-TV operator.

Shares in the satellite platform continued their upward trajectory Thursday, hitting a nine-year high of £8.38 ($14) after Sky posted a 24% hike in underlying operating profits to $1.3 billion for the first nine months of the year.

Net profit for the past three months was $396 million. With just days to go before the British government is expected to clear the deal in principle, an all-out battle is prepped to commence between News Corp and Sky's institutional shareholders to price the business once the regulatory path is cleared.

The share price already eclipses the $11.60 a share Murdoch offered last June for the 61% News Corp doesn't already own, and analyst estimates suggest that shareholders should hold out for anything up to $16.50 per share.

BSkyB chief executive Jeremy Darroch said despite the strong performance that "the environment is a bit more difficult, unveiling a year on year slide in net new customer from 62,000 last year to 51,000. But the markets welcomed revenues up 14% at $8 billion and the fact that Sky has increased the average annual customer revenue by 8% to $905.

 

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