Sky Deutschland advises investors to shun BSkyB offer

September 17, 2014
By

(Adds BSkyB comment)

By Harro Ten Wolde

FRANKFURT, Sept 17 (Reuters) – The management of pay-TVprovider Sky Deutschland (Other OTC: SKDTYnews) has advised minorityinvestors not to accept an offer from BSkyB, a tokengesture given that BSkyB’s terms are little more than aformality required after its purchase of a controlling stake inthe broadcaster.

BSkyB in July agreed to buy the 57 percent stake in SkyDeutschland owned by Rupert Murdoch’s 21st Century Fox,and offered remaining shareholders 6.75 euros for each of theirshares, as mandated by German takeover law.

But with only a small premium on the table, analysts havedoubted that many will sell.

Sky Deutschland would thus retain its stock market listingand BSkyB, in which Fox holds 39 percent, has not indicated anydesire to squeeze out minority shareholders above and beyond theoffer which it has set out.

Management of the German company, advised by Bank of AmericaMerrill Lynch, on Wednesday argued the offer fell short of itstrue value.

“The management board and the supervisory board believe thatthe consideration offered by the bidder does not reflect thefull potential and thus intrinsic value of Sky Deutschland’sbusiness,” the two bodies said in a joint statement.

BSkyB said in a statement that it was aware of SkyDeutschland’s position but that the deal was sealed.

“There is no minimum acceptance to our offer and we lookforward to completing the acquisition of Sky Italia and amajority of Sky Deutschland later this year,” it said.

Sky Deutschland Chief Executive Brian Sullivan is the onlymember of the management board who holds shares in the group andhe said he would not be accepting the offer.

Two supervisory board members, Stefan Jentzsch and HaraldRoesch, also said they would not tender shares they hold.

“The management and supervisory board statement fullysupports our assessment that the takeover price is too low anddoes not fully reflect the earnings potential in the company,”DZ Bank analysts said in a client note.

The analysts said they would stick to a “fair value” of 7.60euros per Sky Deutschland share and recommended investors do notaccept the offer.

Sky Deutschland shares were flat at 6.73 euros, around theoffer price, by 0930 GMT.

(1 US dollar = 0.6126 British pound) (Editing by Eric Auchard, David Holmes and Pravin Char)

  • Investment & Company Information
  • Mergers, Acquisitions & Takeovers
  • Sky Deutschland
  • BSkyB

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