Fox already holds a 39 percent stake in the British broadcaster, which operates UK’s largest digital subscription television company. The deal has valued the TV broadcasting service at £18.5 billion ($23.2 billion).
Sky commented on the news of the deal:
“The independent directors of Sky note today’s share price increase, and announce that Sky has received an approach from 21st Century Fox, Inc. After a period of negotiation, the Independent Directors of Sky and 21st Century Fox have reached agreement on an offer price of £10.75 per share in cash, less the value of any dividends subsequently paid by Sky. However, certain material offer terms remain under discussion and there can be no certainty that an offer will be made by 21st Century Fox, nor as to the terms of any such offer.”
21st Century Fox is owned by media mogul Rupert Murdoch’s Newscorp, who has been keen to consolidate his stake in Sky for some time. However, amid the controversy that surrounded Murdoch’s ‘News of the World’ publication and its uncovered participation in hacking activities, a takeover was ultimately ruled out. The news of the potential takeover remains in its preliminary stages, and is not a certainty.
The fine-points of the deal remain yet to be formally announced, however shares in Sky and Fox have rallied amid the news. Shares in the company are up 29.45 percent (4:20PM GMT) as the story continues to develop.
Elsewhere in the media sector, shares in ITV popped higher after the announcement. Speculation a major US media giant was eyeing up ITV at the beginning of 2016 was reignited following the Brexit vote, as the value of the shares in the company plummeted on a dollar basis.
These rumours were dealt a blow recently when the CEO of Virgin Media, whose parent company is Liberty Global, told the Sunday Telegraph, Liberty was too busy with current operations to consider an acquisition. Liberty Global was one of the companies rumoured to be interested in acquiring ITV, due to its nine percent stake in the business.