Rupert Murdoch's News Corp. to Close Deal on BSkyB Next Week
Insiders say British culture secretary Jeremy Hunt will soon sign off, making Murdoch the most powerful person in U.K. media.
LONDON - British Culture secretary Jeremy Hunt could clear News Corp's takeover of BSkyB as early as the beginning of next week, sources said late Wednesday, paving the way for Rupert Murdoch to take become the most powerful person in British media. A complete takeover would channel billions of dollars of BSkyB's stable cash flow onto News Corp's balance sheet and consolidate an asset that many have long thought of as part of the Murdoch family firm.
However, government approval of the deal is only the start of a process that will require BSkyB's independent directors to haggle for the best price for the pay-TV broadcaster, home to premium sport and movies and series like Boardwalk Empire and Mad Men.
When News Corp initially made the offer last summer, Murdoch offered £7 ($11) per share for the pay-TV operator he launched in the late nineties, and which almost bankrupted News Corp. altogether.
But the market is pricing BSkyB's shares at £8 ($13) per share, and analysts have said the deal could be the worth at as much as £10 ($16) per share, which would value it at far more than the initial $12 billion offered.
The satcaster posted profits of £467 million ($752 million) in the six months to the end of January 2011.
At the same time, dollar/sterling rates are trending in such a way as to make the deal pricier for Murdoch as time goes by and already about 10 percent more expensive than it was last summer.
Hunt, who is understood to be in final deliberations over whether to clear the deal or refer it on to the Competition Commission for further regulatory scrutiny, has already given News Corp extra time to address competition concerns in an attempt to clear the deal without a further regulatory process.
He is now thought to be mulling an offer from News Corp to sell 24-hour channel Sky News in order to make the deal palatable to regulators, according to BBC political editor Robert Peston, who has reported that the proposed sale of the loss-making news network was designed to allay concerns over News Corp's media dominance.
"In what News Corp sees as a significant concession and sacrifice, it has offered to sell Sky News," Peston told the BBC News at Six, citing sources close to Hunt.
"And because Sky News is loss-making…News has also offered to in effect cover the costs of Sky News for many years through a long-term contract."