21st Century Fox Finalizes $14.8 Billion Sky Takeover Offer

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Twenty-First Century Fox, Inc. has formally reached an agreement with Sky plc for a total takeover to the tune of $14.8 billion. Of course, Sky’s shareholders and the local government still have something to say about the deal.

Under the terms of the acquisition, Sky shareholders will be entitled to receive £10.75 in cash per share, which represents a pretty healthy premium of 40 percent above December 6, 2016’s closing price. The independent Sky committee intends to recommend unanimously that unaffiliated Sky shareholders vote in favor of the deal. So maybe that one part won’t be a hurdle at all.

Fox currently anticipates that the acquisition will complete before the end of 2017. If not, Sky shareholders will get a special dividend in 2018. The U.K. company will not pay any dividends in 2017.

The final offer is $700 million more than the initial one.

Commenting on the acquisition, 21st Century Fox said:
“As the founding shareholder of Sky, we are proud to have participated in its growth and development. The strategic rationale for this combination is clear. It creates a global leader in content creation and distribution, enhances our sports and entertainment scale, and gives us unique and leading direct-to-consumer capabilities and technologies. It adds the strength of the Sky brand to our portfolio, including the Fox, National Geographic and Star brands.”

“Sky is a creative, commercial, and consumer powerhouse delivering its own content to customers across all platforms. Sky is the No. 1 pay TV brand in all its key markets, with an exciting growth runway in each. The enhanced capabilities of the combined company will be underpinned by a more geographically diverse and stable revenue base. It will also create an improved balance between subscription, affiliate fee, advertising and content revenues. This combination creates an agile organization that is equipped to better succeed in a global market.”

To provide financing for the deal, 21st Century Fox entered into a Bridge Credit Agreement with Goldman Sachs Bank USA, Deutsche Bank Securities Inc. and JPMorgan Chase Bank, N.A., as joint lead arrangers and joint bookrunners. The Bridge Credit Agreement provides for borrowings of up to £12.2 billion.

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